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CBE to discuss future prices of basic interest rates Unlikely for CBE to raise its interest rates on the pound, according to IDBE treasury director-general
The Monetary Policy Committee of the Central Bank of Egypt (CBE) is holding its sixth regular meeting of the current year on Thursday, to decide on the basic interest rates at the CBE, which are used to set interest rates at banks operating in the domestic market. The Monetary Policy Committee had decided within its four previous meetings, which were held in February, April, June, and July, to fix the basic CBE interest rate at 8.75% for deposits, and 9.75% for loans. The committee also kept the price of main transactions, as well as credit and debit, at 9.25%. According to analysts and fund managers at banks, it is highly expected that the committee will decide to maintain the interest rate as it is for the fifth time in a row, during its meeting scheduled for Thursday. The Monetary Policy Committee at the CBE had said in previous statements that although investments directed to major local projects, such as the Suez Canal Development Project, may contribute in increasing economic growth, a decline in GDP growth rate may occur due to the risks surrounding the recovery of the global economy. This is in light of the challenges faced by a number of eurozone countries, and the slowing growth in emerging economies. Director General of Treasury at the Industrial Development and Workers Bank of Egypt (IDBE), Haitham Abdel Fattah, said that the monetary committee is expected to maintain interest rates at the CBE, as decided in February, April, June, and July. Abdel Fattah believes it is unlikely that the CBE will raise its interest rates on the pound, especially since the trend in inflation is declining and the state is keen to stimulate investment and get the economy moving, in order not to further burden of the state budget. The CBE revealed a few days ago the decline of the annual core rate of inflation to 5.61% in August, compared to 6.49% in July. The CBE also announced that the monthly inflation rate fell to 0.23% in August, versus 0.3% in July.
