As expected, CBE leaves interest rates on hold

The Central Bank of Egypt’s Monetary Policy Committee left interest rates on hold at its Thursday meeting, in line with expectations. Overnight deposit and lending rates remained unchanged at 18.75% and 19.75%, respectively, with the discount rate also steady at 19.25%. The move indicates “that further declines in inflation were needed to warrant a shift towards a looser policy,” Reuters says. The CBE is watching for inflation to cool below the 30% marker to 13% by 4Q2018 and single digits afterwards. Annual headline and core inflation rates had dropped for a third consecutive month in October to 30.8% and 30.5%, after climbing to a high of 33.0% and 35.3% in July, “supported by the combination of previous policy rate increases and the recent appreciation of the EGP against trading-partner currencies,“ the CBE said in a statement. “Against this background, the MPC decided that current policy rates remain appropriate...The baseline inflation outlook remains consistent with achieving the CBE's inflation targets.”