The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) maintained interest rates at its last meeting in 2023, according to a press release on December 21st.

The overnight deposit rate and the overnight lending rate remained the same at 19.25% and 20.25%, respectively.

Additionally, the rate of the main operation was kept unchanged at 19.75% and the discount rate was also left unchanged at 19.75%.

“Global economic growth has slowed down, with its outlook revised downwards compared to the previous meeting given the continued effect of policy rate increases by key central banks on demand,” the CBE said.

“Furthermore, key international commodity prices, particularly energy, have declined compared to the previous meeting, mainly due to reduced speculation over oil supply shortages and dampening global demand,” it added.

The CBE noted that the mounting geopolitical tensions have heightened the vagueness of the inflation outlook, especially with regard to oil prices.

It will also continue to assess the overall impact of previously implemented tightening policies and their transmission to the economy using a data-driven approach.

The MPC underscored that the trajectory of forthcoming policy rates hinges on forecasted inflation, not the current inflation rates.

The CBE added that MPC stands ready to employ all accessible tools to uphold a sufficiently restrictive policy stance, preserving the declining trend in underlying inflation.

The tight monetary stance aims to direct future annual inflation rates towards the forthcoming target levels set by the CBE and to ensure price stability in the medium term, the statement highlighted.

It is worth mentioning that Egypt's annual headline inflation dropped to 36.4% in November, compared to 38.5% in October.

In 2023, the CBE raised interest rates by a total of 300 basis points (bps), of which 200 bps in March and 100 bps in August.