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Egypt's central bank keeps interest rates on hold in September

Ahram Online , Thursday 17 Sep 2015
CBE
The Central Bank of Egypt's headquarters in downtown Cairo (Photo: Reuters)
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The Central Bank of Egypt (CBE) decided to keep interest rates unchanged after the bank's Monetary Policy Committee met on Thursday.

The bank kept the overnight deposit rate, the overnight lending rate, and the rate of the CBE's main operation unchanged at 8.75 percent, 9.75 percent, and 9.25 percent respectively, read a CBE statement.

Slowing inflation rates and expectations for slowing growth were cited by the Central Bank as the reasons for holding interest rates.

Egypt's annual inflation rate decelerated to 7.88 percent in August and the core inflation annual rate dropped to 5.61 percent.

The inflation rate is expected to remain low as international commodity prices remain low, said the CBE press release.

On the other hand, the Central Bank anticipates that international economic challenges could pose risks to domestic growth, which recorded 4.6 percent in the first nine months of the fiscal year.

However, an analysis note by London-based Capital Economics cited the same reasons in expecting the Central Bank to cut rates "sooner rather than later".

The CBE was seen by the macroeconomic research company to cut the interest rates by the end of this year by 50 basis points to 8.25 percent and 9.25 percent for deposit rate and lending rate respectively.

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