Cairo – Isam Badawi
The Monetary Policy Committee of the Central Bank of Egypt has decided to cut interest rates by 100 basis points, bringing the overnight deposit and loan rate and the central bank's key operating rate to 13.25%, 14.25% and 13.75%, respectively, and reduced the credit and discount rate by 100%. BPS up to 13.75%.
The annual core and core inflation rate continued to fall to 7.5% and 4.9% in August 2019, the lowest in more than six years, the central bank said in a statement.
This decline was supported by the maintenance of inflationary pressures, as well as the positive impact of the base year, where general inflation registered a monthly rate of 0.7% in August 2019, compared to 1.8% in August 2018.
“ At the same time, preliminary data indicate that real GDP growth rate continues to rise, to 5.7% in the second quarter of 2019 and 5.6% in fiscal 2018/2019, the highest rate of the week. The unemployment rate continued to decline to 7.5% during the second quarter of 2019, a decline of almost six percentage points from its peak of 13.4% during the fourth quarter of 2013. & # 39; & # 39;
"On the other hand, the slowdown in the growth rate of the global economy and the negative impact of trade tensions on growth prospects, which has contributed to easing the global financial situation by reducing core rates of return for many central banks, and global oil prices. remain vulnerable to fluctuations due to possible factors Supply side involving regional risks. "
He pointed out that "in view of the continued retention of inflationary pressures and all domestic and international developments, the Monetary Policy Committee has decided to reduce the central bank's base rate of return by 100 basis points."
This decision is in line with the realization of the target inflation rate of 9% (3%), during the fourth quarter of 2020 and price stability in the medium term.
The Egyptian Central Bank noted that "the committee will continue to make its decisions based on expected inflation rates in the future, not the prevailing inflation rates, and therefore the pace and magnitude of future adjustments to the central bank's base rate of return will continue to rely on the consistency of inflation expectations with target rates, This is to ensure the continued downward price stability target in the medium term. "