Thu, 07 Jul 2022

Egypt raises interest rates to curb inflation

20 May 2022, 04:30 GMT+10

CAIRO, May 19 (Xinhua) -- The Central Bank of Egypt (CBE) decided on Thursday to raise its interest rates amid a global wave of inflation and hiking prices.

The CBE decided to increase the deposit rate, the lending rate, and the rate of the main operation by 200 basis points, to 11.25 percent, 12.25 percent, and 11.75 percent respectively, the bank's Monetary Policy Committee (MPC) said in a statement following Thursday's meeting.

It pointed out that the decision was driven by the global economic slowdown "due to ongoing tensions between Russia and Ukraine."

Egypt's annual headline urban inflation increased to 13.1 percent in April, up from 10.5 percent in March, its highest monthly level since May 2019, said the MPC.

Already expected by many economists and officials, the CBE's rate hike decision came after many countries have done the same, after the U.S. Federal Reserve raised its benchmark interest rate by 0.5 percentage points to a target rate range of between 0.75 and 1 percent, the sharpest rate hike since 2000.

"The MPC will continue to closely monitor all economic developments and will not hesitate to utilize all available tools to achieve its price stability mandate over the medium term," the statement concluded.

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