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Unexpected Surge in Interest Rate by 2 Percent: CBE

Unexpected Surge in Interest Rate by 2 Percent: CBE

Several Egyptian pound notes are pictured in New York Thursday, April 28, 2005. Photographer: Daniel Acker/Bloomberg News.

The Central Bank of Egypt (CBE) has raised its benchmark interest rates by 200 basis points for the second time this year.

The Monetary Policy Committee (MPC), led by Governor Tarek Amer, of Egypt’s Central Bank raised the overnight deposit rate to 18.75 percent, a record high, the bank said on Thursday.

The lending rate was also raised to 19.75 percent, according to a statement by CBE.

“The decision is temporary and aimed at curbing inflation and maintaining the purchasing value of the pound, and it is the last dose of the antibiotic and treatment, the economy will then begin to recover,” reported by Egypt

The decision brings the total increase in borrowing costs to 700 basis points since the central bank floated the Egyptian pound against all foreign currencies in November.

Earlier in May, The Monetary Policy Committee (MPC) of Egypt’s Central Bank raised key interest rates by two percentage points to 16.75 percent, a record high. The lending rate was also raised to 17.75 percent.

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Engy Adham is a Cairo-based journalist. She works as the managing editor at Egyptian Streets. She reports on social issues and arts and culture. Previously published in Daily News Egypt, Ahram Online among others. She received her bachelor’s degree in Multimedia Journalism and Political Science from The American University in Cairo. Follow her on @J_Adham_

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