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Investing.com – Moments ago, the central bank issued a highly anticipated meeting following the signing of the International Monetary Fund’s $3 billion final loan deal with Egypt.
Today, Thursday, the Central Bank of Egypt decided to raise interest rates by 300 basis points. The interest on overnight deposits rose to 16.25% from 13.25%, while the bank raised the overnight lending rate to 17.25% from 14.25%.
The central bank aims to achieve price stability over the medium term and, in parallel with the central bank’s previous announcement to set inflation rates on a downward path, the target inflation rates over the next period have been set at the level of 7% in average during Q4 2023 and the 5% level averaged during Q4 2026.
pound today
The Egyptian pound stabilized in the official foreign exchange market, compared to the end of trading on Thursday, at the levels of the day before yesterday, on Tuesday, as the pound registered a single decline, within the limits of 3 plates, during 7 consecutive days.
On Thursday, the Central Bank of Egypt’s official price screen revealed the stability of the pound against the dollar, with the selling price registering levels of 24.7653 pounds per dollar, while the purchase price registered levels of 24.6865 pounds per dollar. In the national banks, National Bank of Egypt and Banque Misr, the dollar exchange rate stabilized at levels of 24.69 pounds per dollar for sales and 24.64 pounds per dollar for buys. In private banks, Al-Masry Al-Khaleeji, Abu Dhabi Islamic Bank, Mashreq Bank, Al-Ahly of Kuwait (Piraeus) and Commercial International (CIB), the sale price recorded 24.75 pounds per dollar, while the price purchase recorded 24.72 pounds to the dollar.
Black market
The black market exchange rate fell after the fund’s loan was signed, falling to £29 to the dollar, compared with £38 to the dollar before the signing.
Before the signing, it surpassed 33 pounds per dollar, in a fierce state of speculation, in light of expectations of a third quotation of the local currency.
Pre-decision forecasts
Market experts had expected Egypt’s central bank to lift its overnight deposit interest rate by 200 basis points today, Thursday, as part of its efforts to curb rising inflation after the sharp decline in the value of the local currency .
Median expectations were that the Central Bank of Egypt would raise deposit interest rates to 15.25% and loan interest rates to 16.25% at the regular meeting of the Monetary Policy Committee.
The central bank raised interest rates by 200 basis points in a surprise meeting held on October 27, and the local currency depreciated by 14.5% on the same day.
Egypt’s headline inflation rate jumped to a five-year high of 18.7% in November, from 16.2% in October.
The central bank said after last October’s meeting that prices will continue to exceed the inflation target range of 5-9% during the fourth quarter.
proactive decisions
In a surprise decision by Egyptian banks, an hour before the central bank meeting, national banks agreed to raise the commission rate on US dollar cash withdrawals outside Egypt.
Some banks have announced changes to foreign currency cash withdrawal limits on all cards, effective yesterday, with the limits being changed and the use of the cards restricted to some purchases from abroad.
On Sunday, the Central Bank of Egypt sent a letter to the banks under its regulatory umbrella, in light of the violent fluctuations in the country’s markets, which have caused prices to reach unprecedented levels.
According to the directives of the Central Bank, in the event that the proceeds of export operations relating to gold do not arrive within a maximum period of 7 working days from the date of shipment, and after the bank follows up with the customer for only the next 3 working days, it must inform the Central Bank.
