Thursday 25 June 2020
Books – Mostafa Eid:
Today, Thursday, the Central Bank’s Monetary Policy Committee meets to resolve the fate of interest rates, amid expectations that they will be fixed, as happened in the last two meetings of the committee before this meeting.
Today’s sixth meeting of the committee comes after interest rates were fixed during the last two meetings on April 2, and the fourteenth of last May at 9.25% for deposit and 10.25% for lending, after an exceptional rate cut of 3% at an emergency meeting on March 16 last To face the repercussions of the emerging crisis of Corona virus
In the previous report of Masrawy, 4 analysts with investment banks and 3 bankers expected that the central bank will keep interest rates unchanged during a meeting of the monetary policy committee today.
Since the float until this meeting, the Monetary Policy Committee has moved interest rates 10 times in 5 years, including 3 times; To raise it and 7 times to lower it.
The first interest movements since the float, the most prominent of which is what happened in conjunction with the decision to liberalize the exchange rate itself on the third of November 2016, when the central bank raised interest rates 3% in one payment; To reach 14.75% for deposit, and 15.75% for lending.
On May 21, 2017, the Central Bank was on a second date, raising interest rates after floating, by 2%, to reach 16.75% for deposits, and 17.75% for lending.
The third and final increase in interest after floating on the sixth of July 2017, also by 2%, to reach its highest levels during the past five years at 18.75% for the deposit, and 19.75% for lending.
In the following year, the direction of the central bank shifted after controlling the large wave of inflation in 2017, so that in 2018 the Central Bank begins a cautious and gradual reduction in interest rates, to reduce it by 1% on February 15 and another 1% on March 29, to stop the interest movement in this year after that. 16.75% for deposit, and 17.75% for lending.
And last year was the most exciting and moving in the level of interest rates since the float and until now, as the interest was reduced by 4.5% on 4 times during 2019, including 1% on February 14, then 1.5% on August 22, then 1% on September 26, then 1% on November 14, to reach the end of the year to 12.25% for the deposit, and 13.25% for lending.
In 2020, there was a single reduction in interest rates, but it was significant and exceptional and occurred during an emergency meeting and was not on the central bank’s schedule this year, as part of measures to address the major repercussions of the emerging Corona Virus pandemic on the local and global economy.
The emergency meeting of the Central Bank’s Monetary Policy Committee on March 16 saw a rate cut of 3%, so that since then it has reached 9.25% for deposits, and 10.25% for lending, a level that some analysts expect to continue until the end of 2020.