The Clap
The Monetary Policy Committee (MPC) has cranked up the heat on interest rates, turning up the dial by 300 basis points.
What
The Central Bank of Egypt’s overnight deposit rate, overnight lending rate, & main operation rate are now 16.25%, 17.25%, and 16.75%, respectively, while the discount rate has also been raised to 16.75%.
So what
The MPC believes that demand-side pressures are increasing & wants to keep a lid on soaring inflation (currently above 18%) by setting inflation targets of 7% (± 2 percentage points) by Q4-2024 & 5% (± 2 percentage points) by Q4-2026.
Now what
The MPC wants to make it crystal clear: future interest rates are all about the expectation of inflation, & not the current levels of inflation.
