Egypt’s central bank left its overnight interest rates unchanged on Wednesday.
The central bank’s monetary policy committee (MPC) kept the overnight lending rate at 9.25 percent and the overnight deposit rate at 8.25 percent for a fourth consecutive time, after cutting rates in September and November.
The headline inflation had stabilized at 4.5 percent in February and March, and the global economy was showing signs of recovery, the MPC said.
It added that annual food inflation increased in March 2021 after remaining stable in February 2021, reflecting higher annual contribution of volatile food items as well as core food items, but by a lesser extent, in line with their seasonal patterns.
“Meanwhile, annual non-food inflation declined, supported by broadly stable prices in March 2021 as well as favorable base effects. In the meantime, annual core inflation inched up slightly to 3.7 percent in March 2021 from 3.6 percent in February 2021,” MPC stated.
It also referred to the real GDP growth recorded a preliminary figure of 2.0 percent during 2020 Q4, up from 0.7 percent during the previous quarter. Moreover, some leading indicators point towards a resumption of recovery towards their pre-pandemic levels.
Meanwhile, the unemployment rate stabilized at 7.2 percent during 2020 Q4, compared to 7.3 percent during the previous quarter, according to MPC.
Further, Minister of Finance Mohamed Maait pointed foreign reserves have increased significantly to exceed $40 billion to cover more than seven months of the import bill for goods and services.
In a related context, Bloomberg said Wednesday that local bonds could get a boost from their presence in a JPMorgan Chase & Co. index, with the bank putting Egyptian debt on review for inclusion in its local-currency government bond gauge.
