The Central Bank of Egypt's (CBE) Monetary Policy Committee decided on Thursday to stabilise the main interest rates at the same levels that were reached on 3 November. The CBE raised interest rates on 3 November as an exceptional measure, not as of part of the periodic committee meeting. This measure came alongside a decision to float the Egyptian pound in order to contain inflation that could result from the flotation, and to encourage citizens to save in Egyptian pounds at higher interest rates and sell their US dollars. The interest rates are currently at 14.75% for deposits to 15.75% for lending, and at 15.25% for the CBE credit and discount rates. The Monetary Policy Committee's decision was largely expected by analysts, investment bankers, and research centres. Tamer Youssef, head of the treasury at a foreign bank operating in the Egyptian market, said previously the committee is likely to keep these rates unchanged from the rates of 3 November, during its Thursday meeting. He added that the committee may reconsider the rates only in its last meeting of the year on 29 December, and take action according to the developments in inflation rates at that point. He said there could be a further rate hike before the year ends. But until then, Youssef believes that the current rates may remain in place for three to six months, as they would attract foreign investors to buy government debt instruments. This, he added, would be followed by a decision to reduce the rate in the second half of 2017, as the state will be aiming to revive the economy through adopting an expansion policy.
