The Egyptian Central Bank kept the main interest rates unchanged Thursday, in an unexpected situation for a round of monetary easing that began last August.
The Monetary Policy Committee of the Central Bank of Egypt said in a statement that the bank kept the main deposit interest rate stable at 12.25%, and the lending interest rate at 13.25%.
Eight of the 11 economists surveyed by Reuters had expected the central bank to cut interest rates. Of those eight, four expected a 50 basis point decrease, while the other four expected a 100 basis point decrease.
The Egyptian Central Bank cut interest rates in each of its previous three meetings amid declining inflation, with consumer price inflation in Egypt declining to 3.1% in October.
But last December, inflation jumped to 7.1% year-on-year, from 3.6% last November.
The Central Bank commented on this, saying in a statement, “The current interest rates are suitable at the present time and are consistent with achieving the targeted inflation rate.”
The statement added, “The Central will continue to follow all economic developments and will not hesitate to resume monetary easing, provided it continues to contain inflationary pressures.”
For his part, head of research at “Naeem” Financial Brokerage Company, Allen Sandeep, said that the sudden keeping of interest rates stable is likely due to the increase of 3.5% in inflation.
It is expected that the central decision will contribute to strengthening the pound for its positions against the American currency, whose exchange rate fell yesterday suddenly to reach 15.76 pounds for a dollar to buy and 15.89 pounds to a dollar for sale.