The Monetary Policy Committee (MPC) at the Central Bank of Egypt (CBE) decided to keep its key interest rates unchanged. The deposit rate, overnight and lending rates have been maintained at 8.75%, 9.75% and 9.25%, respectively.
The CBE also kept the discount rate unchanged at 9.25%. The MPC judges the interest rates by the developments in inflation rates and gross domestic product (GDP) growth.
In March, the annual annual inflation rate rose to 11.86% in March, from 10.7% registered in February. The month-on-month increase was approximately 1.55%
“The bulk of the monthly developments were driven by the upward adjustments in administered prices, particularly tobacco, in addition to supply bottlenecks related to the distribution of butane cylinders. This was coupled with increases in the prices of volatile food items,” the CBE said in its MPC report.
“Upside risks on the inflation outlook from domestic supply shocks are largely mitigated by contained imported inflation, against the background of lower oil prices and the consequent revision in international food price forecasts,” the report added.
Last month, Minister of Investment Ashraf Salman said the Egyptian government is targeting a 4.2% growth rate for the fiscal year (FY) 2014/2015, compared to the 2.2% rate registered last year.