Central Bank of Egypt raises policy rates by 200 basis points

The Central Bank of Egypt announced Thursday it raised its key policy rates by 200 basis points, citing high commodity prices, Anadolu News Agency reports.

The bank said its overnight deposit rate and the overnight lending rate were increased to 11.25 per cent and 12.25 per cent, respectively.

The rate of the main operation and the discount rate were each raised to 11.75 per cent.

“Global economic activity has slowed down due to ongoing tensions between Russia and Ukraine,” the bank’s Monetary Policy Committee (MPC) said in a statement.

READ: About 300,000 tonnes of wheat bought by Egypt stranded in Ukraine

“Trade sanctions imposed on Russia and corresponding supply-chain bottlenecks have elevated global commodity prices, such as international prices for oil and wheat, with the latter’s global supply also impacted by adverse weather conditions and poor harvests in select regions,” it added.

It is the second rate hike in Egypt since March when the Central Bank raised rates by 100 basis points, its first hike since 2017.

Egypt’s annual inflation rose to 13.1 per cent in April, marking its highest level since May 2019.