2023-09-21 19:40:34
Egypt’s central bank as expected left overnight interest rates unchanged on Thursday, saying economic growth and core inflation were slowing.
The bank maintained its lending rate at 20.25% and its deposit rate at 19.25%.
The median forecast in a poll of 17 analysts was that the bank’s Monetary Policy Committee (MPC) would leave rates unchanged. Five analysts expected a rise of 100 basis points (bps) and another a rise of 200 bps.
The MPC said gross domestic product grew by 3.9% in the January-March quarter, bringing GDP for the first nine months of the 2022/23 financial year to 4.1%. The fiscal year ends on June 30.
“Leading indicators for the second quarter of 2023 point to a moderation in real GDP growth,” the CPM said.
“Real GDP growth is expected to slow in the 2022/23 financial year compared to the previous financial year, before gradually recovering over the medium term.”
In March, a presidential spokesperson said Egypt was targeting GDP growth of 5% in 2023/24.
Some analysts said the central bank might consider raising rates to help control inflation, which was higher than expected in August.
The annual urban consumer price inflation rate hit a record 37.4 percent in August, up from 36.5 percent in July, also a record, statistics agency CAPMAS said last week.
However, core inflation, which excludes volatile products, fell to 40.4% in August, from 40.7% in July and a record 41.0% in June.
“Inflation dynamics for July and August 2023 mainly reflect the combined effect of unfavorable weather conditions amplifying the seasonal rise in prices of agricultural products as well as supply chain disruptions,” the monetary policy committee said .
The Monetary Policy Committee said it was targeting average inflation of 5% to 9% by 2024.
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