(3 minutes read)
The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) has announced that it will use all available monetary policy tools to maintain restrictive monetary conditions and reach the desired inflation rates.
The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) has announced that it will use all available monetary policy tools to maintain restrictive monetary conditions and reach the desired inflation rates. The MPC also stated that its key interest rates depend on expected inflation rates, not current inflation rates and that it will monitor the economic developments and the risks surrounding inflation expectations.
The CBE has set its inflation targets at 7% (±2%) on average in the fourth quarter of 2024 and 5% (±2%) on average in the fourth quarter of 2026. The MPC decided to keep the CBE’s basic interest rates unchanged at 19.25% for deposits, 20.25% for lending, and 19.75% for the credit and discount rates and the main operation of the CBE. The decision was made recently, amid rising global commodity prices, especially energy prices, due to the geopolitical tensions in the region.
The MPC also pointed out that the restrictive monetary policies, along with the high degree of uncertainty caused by the recent geopolitical tensions, contributed to lower global economic growth expectations compared to the previous MPC meeting. On the domestic front, the MPC said that the real GDP growth rate stayed at 3.9% in the first quarter of 2023, the same as the fourth quarter of 2022. The MPC explained that the economic activity in the first quarter of 2023 was driven by the positive contribution of consumption and net exports. The MPC added that net exports have been the main support for growth since the first quarter of 2022, in line with the exchange rate developments. The MPC expects the GDP growth rate to slow down in the fiscal year 2022/2023 compared to the previous fiscal year, which recorded 6.7%.
Read Also:
https://trendsnafrica.com/egypt-to-collaborate-with-japan-for-real-estate-development/
https://trendsnafrica.com/amazon-prime-air-to-expand-its-drone-manufacturing-facility-in-egypt/
The MPC also said that the unemployment rate decreased to 7.0% in the second quarter of 2023, compared to 7.1% in the previous quarter, mainly due to the increase in the number of workers at a faster pace than the increase in the labor force.
