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Cairo – Mubasher: The Monetary Policy Committee of the Central Bank of Egypt (CBE) examined the reasons why it lowered interest rates on deposits and loans by 150 basis points. view as well as the central rate of the central bank.
At its meeting on Thursday, the committee decided to reduce by 150 basis points the deposit rate and demand loan and the main rate of the central bank, reducing them to 14.25%, 15.25% and 14%. , 75%, respectively.
L & # 39; inflation
The Monetary Policy Committee said in a statement that its decision to reduce interest rates was due to the continued decline in the annual rate of core inflation, falling to 8.7% and 5 respectively, 9% in July, the lowest rate in nearly four years, despite public control of the budget. This resulted in the cost of most petroleum products.
Last month, the Egyptian Ministry of Petroleum and Mineral Resources announced that it would change fuel prices from Friday, July 5, bringing the price of gasoline to 95 to 9 pounds per liter..
The central bank pointed out that the decline in inflation was favored by the control of inflationary pressures, which was reflected in the relative decline in monthly inflation rates, as well as by the positive impact of inflation. Year, the government's recently implemented fiscal control measures were weaker than the previous year.
Growth and unemployment
The reasons also include preliminary data indicating that the growth rate of real GDP continued to increase slightly, reaching 5.7% in the second quarter of 2019 and 5.6% in the previous financial year, the highest rate since the 2007-2008 fiscal year, the commission said. .
"The unemployment rate continued to decline to 7.5% in the second quarter of 2019, down 6 percentage points from its peak of 13.4% in the fourth quarter of 2013".
The global economy
In addition to the reasons for lower central rates, the slowing of global economic growth and the negative effect of trade tensions on growth prospects, which have helped ease the global financial situation by reducing core interest rates several central banks, led by the US Federal Reserve.
He noted that the recent decline in world oil prices, still vulnerable to fluctuations due to regional risks, was adding to other supply factors.
The Monetary Policy Committee: "Given the continued control of inflationary pressures and all developments at the national and global levels, the Committee has decided to reduce the central bank's base rate of return by 150 basis points".
She pointed out that this decision is consistent with achieving the target inflation rate of 9% in the fourth quarter of 2020 and price stability over the medium term.
The committee hinted that it would continue to make decisions based on expected inflation rates in the future and not prevailing inflation rates. The objective of lower price stability in the medium term.
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