The Central Bank of Egypt (CBE) Monetary Policy Committee (MPC) will meet on Thursday to decide on the interest rates amid expectations of a new rate cut to pursue the monetary easing cycle that the CBE began last month.
In this context, banking expert Hany Abou-el Fotouh expects that MPC at its next meeting to reduce the overnight deposit rate, the overnight lending rate, and the rate of the main operation by 1% to 1.5%. The expected decision would consider the Federal Reserve action that lowered interest rates by 0.25%, its second cut since late July for the first time since the 2008 financial crisis amid trade uncertainty and global economic challenges.
Abou-el-Fotouh attributed the MPC's interest rate cut to the low inflation, which is the main reason for the MPC's decision to cut the interest rate, as the cut would  stimulate the economy in general and help to get out of the market stagnation. “The new cuts are a positive action towards financing the debt-service” He added.
The Central Agency for Public Mobilization and Statistics (CAPMAS) announced that Egypt’s annual consumer price inflation recorded 6.7% in August 2019, compared to 7.8% in last July, the lowest level since 2013.
CBE said that Egypt’s annual core inflation rate declined to 4.9% in August 2019, from 5.9% in July, according to a CBE statement. Core inflation discounts or strips out certain categories that are considered more volatile.
CBE cut interest rates by 1.5% on deposit and lending at the last meeting of MPC on 22 August last to reach 14.25% for deposit and 15.25% for lending.