The Central Bank of Egypt (CBE) is adopting a policy of ‘wait and see’, after the Monetary Policy Committee’s last decision to fix the interest rate at three percent, Tariq Metwally, a banking expert, said, citing three factors that led the CBE to fix its interest rates.
The Central Bank took advantage of the tools of the monetary policy, and the financial policy to implement and enhance market stability, he added.
Three factors led to interest rate fixation:
Metwally referred to three factors that led to fixing the interest rates.
This is the committee’s previous decision to increase interest rates by three percent as well as stopping the issuance of savings certificates of 25 percent and 22.5 percent.
It is unreasonable to cancel the certificates and increase the interest rate again and third the announcement of the CBE of the return of hot money.
Metwally explained that the Central Bank is expected to wait for the results of recent customs exemptions.
Also the impact of the quantities of commodities that were pumped into the markets on prices, then evaluate the situation and take the appropriate step.
The Central Bank has already taken a proactive step in its last meeting by increasing interest rates by 300 basis points.
The Monetary Policy Committee of the Central Bank of Egypt, on Thursday, corresponding to fixed deposit rate, overnight lending rate, and the rate of the main operation at 16.25 percent, 17.25 percent, and 16.75 percent, respectively and the credit and discount rates were kept at 16.75 percent.
The Monetary Policy Committee maintained, during its previous meeting in September 2022, deposit rate, overnight lending rate, and the rate of the main operation of the Central Bank at 11.25 percent, 21.25 percent, and 11.75 percent, respectively.
The current basic interest rates, along with an increase in the percentage of cash reserves that banks are committed to keeping with the Central Bank of Egypt, are consistent with achieving the goal of price stability in the medium term, the CBE said at the time.