This photo taken on March 6, 2024 shows Egyptian pound notes in Cairo, Egypt. The Central Bank of Egypt (CBE) raised its interest rates by 600 basis points (bps) on Wednesday and said it would allow the exchange rate to be determined by the market in a bid to ensure a smooth transition to a flexible inflation targeting regime. (Xinhua/Sui Xiankai)
CAIRO, March 6 (Xinhua) -- The Central Bank of Egypt (CBE) raised its interest rates by 600 basis points (bps) on Wednesday and said it would allow the exchange rate to be determined by the market in a bid to ensure a smooth transition to a flexible inflation targeting regime.
In a statement, the central bank raised the overnight lending rate to 28.25 percent, its overnight deposit rate to 27.25 percent, and the rate of the main operation to 27.75 percent.
The CBE decided to accelerate the monetary tightening process in order to fast-track the disinflation path and ensure a decline in underlying inflation.
Egypt's annual inflation figures, despite recent declines, are expected to remain substantially above the CBE's inflation target of 7 percent (±2 percentage points) on average in the fourth quarter of 2024, according to the statement.
Aimed at maintaining price stability over the medium term and safeguarding the requisite conditions for sustainable economic development of the country, the CBE will continue the transition to a flexible inflation targeting regime, it added.
"The announced measures have been adopted as part of a set of comprehensive economic reforms and backed by the steadfast support of multilateral and bilateral partners," it said, adding that in preparation for the successful implementation of these measures, sufficient funding has been secured to avail foreign exchange liquidity. ■
This photo taken on March 6, 2024 shows the Central Bank of Egypt (CBE) building in Cairo, Egypt. The CBE raised its interest rates by 600 basis points (bps) on Wednesday and said it would allow the exchange rate to be determined by the market in a bid to ensure a smooth transition to a flexible inflation targeting regime. (Xinhua/Ahmed Gomaa)
A man walks out of an exchange office in Cairo, Egypt, on March 6, 2024. The Central Bank of Egypt (CBE) raised its interest rates by 600 basis points (bps) on Wednesday and said it would allow the exchange rate to be determined by the market in a bid to ensure a smooth transition to a flexible inflation targeting regime. (Xinhua/Ahmed Gomaa)
This photo taken on March 6, 2024 shows U.S. dollar and Egyptian pound notes in Cairo, Egypt. The Central Bank of Egypt (CBE) raised its interest rates by 600 basis points (bps) on Wednesday and said it would allow the exchange rate to be determined by the market in a bid to ensure a smooth transition to a flexible inflation targeting regime. (Xinhua/Sui Xiankai)
