The Central Bank of Egypt (CBE) kept its interest rates unchanged on Thursday, a day after Governor Tarek Amer stepped down just over a year before the completion of his final term.
The central bank’s Monetary Policy Committee (MPC) kept the overnight deposit rate, overnight lending rate and the rate of the main operation unchanged at 11.25%, 12.25% and 11.75%, respectively for a second consecutive meeting.
The top lender also held the discount rate at 11.75%, saying its decision is consistent with achieving price stability over the medium term. The Arab world’s most populous nation has hiked rates by a cumulative 300 basis points since March, although the move is yet to slow the consumer-price index, which reached an annual 13.6% in July.
“The MPC treats the developments emanating from the Russo-Ukrainian conflict to be among the exogenous shocks that are outside the scope of monetary policy and yet may lead to transitory deviations from pre-announced target rates,” the CBE said in a statement.
Egypt has been ramping up efforts to fight inflation, including devaluing the pound in March. The North African country also secured more than $22 billion through deposits and investments from its GCC allies to cushion its economy after foreign investors withdrew $20 billion from local debt markets.
However, economists are saying Thursday’s decision is probably temporary, with monetary tightening likely to resume under a new governor.
Meet new CBE Governor
Hassan Abdalla was appointed the acting governor of the central bank to replace Amer who held the post since 2015 and was appointed for a second term four years later. The leadership change at the central bank comes at a time when the economy is battling the spillover effects of Russia’s war in Ukraine.
