Egypt’s central bank to review key interest rates on Thursday, the first under IMF loan deal

The CBE hiked interest rates by an unprecedented eight percent (800 bps) over 2022.

The meeting, which comes a few days before releasing January inflation readings, will be held amid expectations that the MPC may hike interest rates by up to two percent (200 bps), as the local inflation maintains its upturn trend.

Egypt’s annual urban consumer inflation continued to rise in December, recording 21.3 percent, the highest since the end of 2017, according to the latest figures published early January by the Central Agency of Public Mobilisation and Statistics (CAPMAS).

Banking expert Hani Abul-Fotouh projected the CBE may raise the key interest rates by between one percent (100 bps) and two percent (200 bps) in its meeting on Thursday as a monetary policy tool to tame the soaring inflation.

“Although CAPMAS has not announced January’s inflation readings yet, price trends in the local market indicate a continuous inflation rise, as prices are elevating day after another. Inevitably, the CBE will hike the interest rates amid the inflation wave,” Abul-Fotouh explained.

He expected inflation to keep its upward path to hit 24 percent and major banks in Egypt to issue new certificates of deposit (CDs) with an interest rate higher than 25 percent.