Egypt’s central bank decided to keep the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 27.25%, 28.25%, and 27.75%, respectively.
The Central Bank of Egypt’s (CBE) Monetary Policy Committee also kept the discount rate unchanged at 27.75%.
CBE said in a statement that the decision reflects the recent developments and outlook at the global and domestic levels.
Globally, the statement noted the economic growth outlook remains positive, albeit below its historical average. Monetary policy tightening cycles in advanced and emerging market economies have contributed to a decline in inflation worldwide, with select central banks cutting interest rates after inflation approached its targeted levels.
Domestically, real GDP growth moderated to 2.2% in Q1 2024 from 2.3% in the previous quarter, mainly reflecting negative spillovers from geopolitical tensions and maritime trade disruptions to the services sector.
Furthermore, leading indicators for Q2 2024 suggest that economic activity remains subdued. Consequently, real GDP growth is expected to slow down in FY 2023/24 compared to the previous fiscal year before recovering in FY 2024/25.
The labour market data show that the unemployment rate has slightly declined to a record 6.7% in Q1 2024 from 6.9% in Q4 2023.
