The Central Bank of Egypt (CBE) said that in light of the recent global developments following the COVID-19 outbreak, its Monetary Policy Committee (MPC) decided in an unscheduled meeting on Monday to cut the overnight deposit rate, overnight lending rate, and the rate of the main operation by 300 basis points to 9.25 percent, 10.25 percent, and 9.75 percent, respectively.

The discount rate was also decreased by 300 basis points to 9.75 percent.

The MPC’s preemptive decision provides appropriate support to domestic economic activities given the current challenging global environment, while the inflation outlook remains consistent with achieving the inflation target of nine percent (±3 percentage points) in the fourth quarter of 2020.

“The MPC will continue to closely monitor all economic developments and will not hesitate to adjust its stance to achieve its price stability mandate over the medium term,”, according to the CBE statement.

Governor of the Central Bank of Egypt (CBE) Tarek Amer said the CBE has taken precautionary procedures in response to global challenges, adding that Egypt’s economy is strong.

He added that the new cuts are the largest since the floatation of the Egyptian pound in November 2016 and are expected to boost public, private, and enterprise sector companies.

“The new cuts will support companies significantly, particularly after their debts have hit EGP 2.8 trillion. These debts will decline by billions after the new cuts have been introduced, easing the burden of both the private sector and finance ministry”, said Amer.

He added that the domestic debt exceeds EGP 4 trillion, and the new cuts will help the finance ministry to boost other sectors. In addition, the new cuts will have a positive impact on clients at banks.

Amer said he has instructed all banks to put off the debt payment of small and medium companies for six months, with no fines incurred.

“We are urging the people to use e-money instead of paper money,” he added.