The Egyptian central bank cut its main interest rates by a percentage point each on Thursday, the first time it has lowered them since letting the currency float freely in 2016, as inflation sinks to its lowest levels in at least a year.
The bank cut its overnight deposit rate to 17.75 percent from 18.75 percent and its overnight lending rate to 18.75 percent from 19.75 percent, it said in a statement.
"As incoming data continued to confirm the moderation of underlying inflationary pressures, the MPC (Monetary Policy Committee) decided to cut key policy rates by 100 basis points," the bank said.
Eight out of 10 economists polled by Reuters said earlier this week the bank would cut its key rates.
Economists said on Thursday the move would have a positive impact on the market.
"A one percent cut is a great signal for investors that the tightening of monetary policy has ended and also a conservative approach which is highly needed in order to test market activity moving forward," Noaman Khalid, CI Capital Asset Management economist, told Reuters after the cut.
He said he expected another cut of 100 basis points at the bank's next policy meeting, scheduled for March 29.
