The Monetary Policy Committee at the Central Bank of Egypt will meet this evening, Thursday 11/21/2024, to discuss new interest rates, amid strong expectations to keep interest rates unchanged.
A poll of 15 analysts expects the Central Bank of Egypt to keep overnight interest rates unchanged when its monetary policy committee meets on Thursday as inflation continues to decline, according to Reuters.
The central bank kept interest rates steady at its last two meetings on July 18 and May 23, saying economic growth remained slow but inflation was falling.
On March 6, the bank raised interest rates by 600 basis points as part of an $8 billion agreement with the International Monetary Fund, bringing the total increases since the beginning of the year to 800 basis points.
The average expectation in a poll conducted among 15 analysts was that the central bank would keep the deposit interest rate steady at 27.25% and the lending interest rate at 28.25% when the committee meets. Only one analyst expected the bank to cut interest rates by 100 basis points.
“We expect the central bank to leave interest rates unchanged given that inflation remains well above target,” said James Swanston of Capital Economics.
“However, the momentum is in the right direction and with a sharp drop in the key interest rate expected in early 2025, attention will shift to the date of the first rate cut – for our part, we have set it in the first quarter of 2025,” he added.
Inflation fell to 25.7% in July, the first time the real interest rate was positive since January 2022, and inflation fell from a record high of 38% in September to 27.5% in June.
The Monetary Policy Committee said it is targeting inflation below 9% by the end of 2024.
Egypt allowed its currency to fall below 50 to the dollar as part of its agreement with the International Monetary Fund in March after fixing it at 30.85 for a year. Since then, the Egyptian pound has risen to about 48.6 to the dollar.
