The Central Bank of Egypt's (CBE) Monetary Policy Committee decided on Thursday to keep the overnight lending rate at 10.25% and the overnight deposit rate at 9.25% for the ninth time since February last year. The rate fixes are an attempt to maintain the bank's monetary policy and to control inflation. The committee also decided to maintain the seven-day repurchase agreement (repo) rate at 9.75% and the discount rate at 9.5%. In its press release the bank said the general consumer price index (CPI) witnessed a monthly increase of 0.15% in December 2012 compared to a 1.31% decrease in November of the same year, while the annual inflation rate reached 4.66% compared to 4.25% in November. The Bank explained the latest developments in the monthly inflation rate by citing the dip in vegetable prices which neutralised the administrative changes in the price of electricity. The statement also mentioned that thanks largely to the recovery of the construction sector, GDP grew by 2.6% in the first quarter of 2012/2013, compared to 2.2% in 2011/2012. The Monetary Policy Committee concluded by saying that interest rates at the CBE are suitable in the light of risk equilibrium related to inflation and growth forecasts augmented to the current state of confusion. The committee confirmed that it will monitor all economic developments closely and will adjust interest rates accordingly to achieve price stability in the medium term. The CBE's Monetary Policy Committee consists of nine members: The Governor of the CBE, the two Deputy Governors, and six members of the Board of Directors. It is responsible for the formulation and implementation of monetary policy, particularly targeting inflation and maintaining price stability.
