Cairo February 2 2024: The Central Bank of Egypt raised its overnight interest rates on Thursday by 200 basis points (bps).
“In its meeting today, the Monetary Policy Committee (MPC) decided to raise the Central Bank of Egypt’s overnight deposit rate, overnight lending rate, and the rate of the main operation by 200 basis points to 21.25 percent, 22.25 percent, and 21.75 percent, respectively. The discount rate was also raised by 200 basis points to 21.75 percent,” the bank said in a statement tonight.
It’s a surprise given a three-month slowdown in inflation and the strain that higher borrowing costs will place on public finances. But the decision is likely an indication that Egypt is creating the conditions for a breakthrough in talks currently underway in Cairo with the IMF on increasing its current $3 billion loan — little of which has been disbursed — as part of a wider package that could exceed $10 billion and include the backing of World Bank.
