The Central Bank of Egypt (CBE) cut key interest rates by 100 basis points on Thursday, the bank announced in a press release.
The overnight deposit rate was lowered to 16.75 percent from 17.75 percent, and the overnight lending rate was cut to 17.75 percent from 18.75 percent.
The rate of the central bank’s main operation and the discount rate were both cut by 100 basis points to 17.25 percent.
Cutting key policy rates remains consistent with tight real monetary conditions and with achieving the target inflation rate of 13 percent (±3 percent) in 2018 Q4 and single digits thereafter, says the CBE.
"Annual headline and core inflation rates continued to decline to record 14.4 percent and 11.9 percent in February 2018, after peaking in July 2017 at 33.0 percent and 35.3 percent, respectively," the CBE said in its statement.
Domestic risks surrounding the inflation outlook include the evolution of inflation expectations, the timing and magnitude of potential subsidy-reform measures, as well as demand-side pressures, according to the CBE.
The CBE also added that risks from the global economy are crude oil price developments and the pace of tightening financial conditions.