The Central Bank of Egypt's (CBE) Monetary Policy Committee (MPC) decided in its meeting on Thursday to cut interest rates by one percent (100 bps).
The new cuts included decreasing overnight interest rates to 13.25 percent, overnight lending to 14.25 percent and the rate on the main operation to 13.75 percent.
The CBE stated the new cuts were driven by the declining inflation rates and public and basic rates that fell recently to 7.5 percent and 4.9 percent, respectively.
It added that the economic indices pointed to economic growth increasing during the second quarter of 2019 to its highest level in 12 years, at 5.7 percent, besides unemployment declining to 7.5 percent, down from 13.4 percent before the beginning of the economic reform programme.
“The slow-down in global economic growth focused the attention on financial easing, that is easing the economic cycle that a number of world central banks have adopted recently while oil prices are still unstable," according to the statement.
The CBE added the new cuts were in line with the government’s inflation rate objectives that aim to reach between six and 12 percent by the fourth quarter of 2020, adding that the MPC would take its future decisions on interest rates according to future inflation anticipations not current ones, and it would not hesitate to review the interest rates to keep the monetary policy safe.
This is the third time the MPC cut interest rates in 2019.