The Central Bank of Egypt (CBE) has decided to keep overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 9.25%, 10.25%, and 9.75%, respectively, Invest-Gate reports. 

In its monthly meeting, the Monetary Policy Committee (MPC) also kept the discount rate fixed at 9.75%, according to an official statement on May 14.

MPC attributed the decision to the annual headline urban inflation, which rose to 5.9% last April, up from 5.1% in the previous month, due to multiple unfavorable base effects stemming from muted price hikes in April 2019, not to mention those of April 2020. The current increases in prices are broadly attributed to the impact of the outbreak of COVID-19, among other reasons aside from the stronger seasonal factor: Ramadan.

“Annual headline inflation in April 2020 was driven by higher annual food contribution, mainly core food items, which more than offset lower annual contribution of non-food items. Accordingly, annual core inflation increased to 2.5% in April 2020 from 1.9% in March 2020,” read the statement.

Commenting on the move, Senior Economic Analyst at Prime Holding Mona Bedir told Al-Ahram Online, “Introducing new cuts would have limited effects on supporting the market amid the uncertainty during the COVID-19 outbreak.”

This decision comes as a part of many actions and measures taken by CBE to curb the effect of the virus outbreak, including the extension of loan maturities to major companies for six months, with no fines or extra charges.