The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) has decided on November 15 to cut the overnight deposit rate, overnight lending rate, and the rate of the main operation by 0.5% (50 bps) to reach 8.25%, 9.25%, and 8.75%, respectively Ahram-Online reports.
The discount rate was also cut by 0.5% to 8.75%. The new cuts bringing the total cuts in 2020 to 4% (400 bps) after a 3% cut in March and 0.5% cut in September.
The MPC’s decision was driven by the latest levels of annual headline urban inflation, which increased to 4.5% in October 2020, up from the 3.7% in September and the 3.4% in August, CBE says in a statement.
“Preliminary figures show that real GDP growth for FY 2019/2020 declined to 3.6%, down from 5.6% in FY2018/2019. Growth was dragged downwards in the second quarter of 2020, mainly due to the partial lockdown measures to combat the COVID-19 pandemic, registering negative 1.7%, down from 5.0% in the first quarter of 2020,” CBE was quoted as saying.
Meanwhile, leading indicators for the third quarter of 2020 continue to show gradual signs of recovery.
According to the statement, global economic activity remains weak despite some recovery; international oil prices broadly stabilized, and global financial conditions continued to improve, supported mainly by policy measures despite the ongoing uncertainty.