Egypt Independent

Egypt’s central bank keeps key interest rates unchanged



CAIRO, May 23 (Reuters) – Egypt’s central bank on Thursday kept its key interest rates unchanged, in line with a Reuters poll of economists.

The central bank held its overnight deposit rate at 15.75 percent and its overnight lending rate at 16.75 percent, a bank statement said.

Leaving them unchanged is “consistent with achieving the inflationary target of 9  percent (±3  percentage points) in 2020 Q4 and price stability over the medium term,” the bank said in a statement.

Headline inflation slowed to 13 percent in April from 14.2 percent in March. It had fallen slightly in March from 14.4 percent in February, its highest since November. The bank’s target range is 10 percent to 16 percent.

Core inflation, which strips out volatile items such as food, also fell in April to 8.1 percent from 8.9 percent the previous month.

The Egyptian pound hit a two-year high on Thursday, bucking a downtrend among emerging market currencies with help from inflows in the tourism and energy sectors.

While the deepening trade conflict between the United States and China has generally heaped pressure on emerging currencies, the pound has risen nearly 5 percent against the dollar since the beginning of the year.

Eleven out of 14 economists polled by Reuters said the Central Bank of Egypt’s (CBE) monetary policy committee was unlikely to change its overnight rates.

Reporting by Amina Ismail, Editing by Alexandra Hudson, William Maclean