In its fifth meeting of the second half of this year, the Central Bank of Egypt decided. The Monetary Policy Committee of the Central Bank of Egypt decided in its meeting on Thursday, corresponding to August 3, 2023, to raise the rates of the one-night deposit and lending return and the price of the main operation of the Central Bank by 100 basis points, to reach 19.25%, 20.25%. % and 19.75%, respectively, and the credit and discount rate were raised by 100 basis points to reach 19.75%.
The reasons that prompted the Monetary Policy Committee to raise interest rates
- At the global level, global commodity price expectations continued to decline compared to those presented to the Monetary Policy Committee during its meeting in June 2023. On the other hand,
- Actual oil prices rose over the past month. Inflation expectations have also declined in some major economies, although they remain above target levels.
- At the same time, expectations for global economic activity rose compared to what was presented to the Monetary Policy Committee at its previous meeting.
- It is expected that the main rates of return will remain at their high levels as a result of the persistence of global inflation rates at levels above those targeted, which is consistent with the tightening of global financial conditions in general.
at the local level
- At the local level, the growth rate of real economic activity remained unchanged, recording 3.9% during the first quarter of 2023 compared to the fourth quarter of 2022.
- The preliminary data for the first quarter of 2023 shows that economic activity was driven by the positive contribution of the tourism, agriculture, and construction sectors.
- It is expected that the GDP growth rate will slow down during the fiscal year 2022/2023 compared to the previous fiscal year, in line with the initial indicators for the second quarter of 2023, and then gradually rise again in the medium term.
- With regard to the labor market, the unemployment rate decreased to 7.1% during the first quarter of 2023, compared to an average of 7.2% during the previous quarter, mainly due to the increase in the number of workers.
- The annual rate of general urban inflation rose to 35.7% in June 2023 from 32.7% in May 2023. The annual rate of core inflation rose to 41.0% in June 2023 from 40.3% in May 2023.
- This was driven by a broad rise in the prices of most items of the consumer price index as a result of persistent supply shocks.
In light of the above, and taking into account the balance of risks surrounding inflation, the Monetary Policy Committee decided to raise the basic interest rates at the Central Bank by 100 basis points to avoid inflationary pressures and control inflation expectations.
The Committee believes that inflation rates are expected to peak in the second half of 2023, before returning to the previously announced target inflation rates, supported by the restrictive monetary policies so far.
The Committee stresses that the path of the basic interest rates depends on the expected inflation rates and not the prevailing inflation rates.
The committee will continue to follow economic developments and expectations during the next stage, and will not hesitate to use all available monetary policy tools, with the aim of maintaining restrictive monetary conditions to achieve the target inflation rates of 7% (± 2 percentage points) on average during the fourth quarter of 2024 and 5%. (± 2 percentage points) on average during the fourth quarter of 2026.
Al-Fajr monitors the exchange rates of the dollar today, after the meeting of the Central Bank of Egypt and before the official bank holiday tomorrow, Friday and Saturday
The price of the dollar in the Central Bank of Egypt maintained its previous levels, at 30.83 pounds for purchase and 30.93 pounds for sale.
On the black market, the price of the dollar decreased between 37 and 38.70 pounds against the dollar, according to some speculators.
The price of the dollar today in the Bank of Cairo
The price of the US dollar against the Egyptian pound reached 30.85 pounds for purchase and 30.95 pounds for sale at Banque du Caire.
The price of the dollar today in the National Bank
The price of the dollar today against the Egyptian pound in the National Bank of Egypt (the largest government bank) recorded 30.75 pounds for purchase and 30.85 pounds for sale.
The price of the dollar today in Banque Misr
The price of the dollar today in Banque Misr recorded 30.75 pounds for purchase and 30.85 pounds for sale.
The price of the dollar in the Bank of Alexandria
In the Bank of Alexandria, the purchase price of the dollar today against the pound reached 30.85 pounds, while its selling price reached 30.95 pounds.
The price of the dollar in cib bank
The price of the dollar today in Egypt at the Commercial International Bank maintained its previous prices at 30.85 pounds for purchase and 30.95 pounds for sale.
