Discover the reasons for stabilization of interest rates by the Central Bank

The Central Bank of Egypt listed several reasons that led to the decision to set interest rates on deposits and loans, mainly the following: inflation rate, GDP growth rate , unemployment rate and world economy.

The annual rate of core inflation and core inflation reached 14.4% and 9.2% in February 2019, compared to 12.7% and 8.6% in January 2019, respectively.

This contributed to higher prices for some food products, especially some fresh vegetables, while the contribution of non-food prices was very limited and the negative effect of the base period contributed in part to the rise in annual inflation rates.

The real GDP growth rate edged up to 5.5% in the fourth quarter of 2018 from 5.3% in the previous quarter.

The unemployment rate fell from 10% to 8.9%, its lowest level since the fourth quarter of 2010.

Available data indicate that private domestic demand and export support net of economic activity continued to be controlled in the third quarter of 2018.

The growth of the global economy and the tightening of global financial conditions have slowed down and the negative impact of trade tensions has continued to weigh on the outlook for the global economy.

World oil prices have recently risen and remain volatile due to potential supply factors.

The Ministry of Finance wishes to achieve a first surplus of 2.0% of GDP during the 2018/2019 financial year, compared with an initial surplus of 0.1% of GDP in the previous financial year, and maintain this surplus in the following years.

The Monetary Policy Committee has decided that current Central Bank yields could achieve the target inflation rate of 9% (± 3%) in the fourth quarter of 2020 and price stability at the end of the year. middle term.

The MPC emphasizes that it closely monitors all economic developments and risk balances and will not hesitate to adjust its policy to maintain monetary stability.

The monetary policy committee of the Central Bank of Egypt (CBE) decided Thursday night to set the rate of overnight deposits and loans at 15.75%, 16.75% and 16.25% respectively and set the credit rate and discount rates at 16.25%.

In times of economic slowdown and high inflation rates, Egyptians use their surplus funds in safe and profitable sanctuaries that generate returns that absorb inflationary effects – high prices of goods and services – and these ships can develop financial resources through various means.