By CentralBankNews.info
Egypt’s central bank left its benchmark overnight deposit rate at 8.75 percent, along with its other key rates, as expected, with the bank confirming its view from recent months that “upside risks to the inflation outlook from domestic supply shocks are largely mitigated by contained imported inflation, against the background of broad-based declines in international commodity prices.”
The decision by the Central Bank of Egypt (CBE) was largely expected and comes a week after the presidency said CBE Governor Hesham Ramez would resign when his term ends on November 26 to be replaced by Tarek Amer, former chief executive of the National Bank of Egypt, the oldest and largest bank in the country.
Under Ramez, who took over the CBE in February 2013, the Egyptian pound has been devalued several times, but critics have said the pound has still been kept at too high a level and the central bank has had to use foreign reserves to maintain its rate.
This year the pound was devalued in January, February, July and earlier this month. Today it was quoted at 8.0 to the U.S. dollar, down 21 percent since the beginning of 2013 and 11 percent this year.
Egypt’s inflation rate rose to 9.21 percent in September from 7.88 percent in August.
The country’s Gross Domestic Product grew by by an annual 3.0 percent in the third quarter of the 2014/15 fiscal year, which ends on June 30, compared with 2.2. percent expansion in the 2013/14 fiscal year.
The CBE repeated that uncertainty surrounding the global economy on the back of softer growth in emerging markets and challenges in the euro area could pose downside risks to growth despite the contribution of domestic mega projects.
The Central Bank of Egypt issued the following statement:
“In its meeting held on October 29, 2015, the Monetary Policy Committee (MPC) decided to keep the overnight deposit rate, overnight lending rate, and the rate of the CBE’s main operation unchanged at 8.75 percent, 9.75 percent, and 9.25 percent, respectively. The discount rate was also kept unchanged at 9.25 percent.