The Monetary Policy Committee (MPC) decided, Thursday to keep the Central Bank of Egypt’s (CBE) overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged for the eighth time in a row at 8.25 percent, 9.25 percent, and 8.75 percent, respectivel.
The discount rate was also kept unchanged at 8.75 percent.
The MPC decided that keeping policy rates unchanged remains consistent with achieving the inflation target of 7 percent (±2 percentage points) on average in 2022 Q4 and price stability over the medium term.
It referred in a statement to the annual inflation rate in September which hiked to 6.6 percent, up from 5.7 percent in August.
“In addition, annual core inflation increased to record 4.8 percent in September 2021 from 4.5 percent in August 2021,” it added.
It clarified that the annual headline inflation rates were affected by unfavorable base effects during September 2021 as expected as well as strong monthly dynamics mainly related to higher tomato prices.
Accordingly, the acceleration in September 2021 was mainly driven by higher annual contribution of food items. Annual food inflation increased for the fifth consecutive month to 10.6 percent in September 2021 from 6.6 percent in August 2021.
Meanwhile, partially offsetting this acceleration, is the decline in annual nonfood inflation to 4.9 percent in September 2021 from 5.3 percent in August 2021, which is the lowest recorded level since December 2012.
According to the statement, the GDP growth recorded 7.7 percent in 2021 Q2 compared to 2.9 percent during the preceding quarter. Economic growth in 2021 Q2 was driven by the strong positive contributions of gross domestic investments as well as that of consumption.
On a sectoral level, tourism, nonpetroleum manufacturing and natural gas extractions contributed most towards growth in economic activity with private sector activity remaining the main contributor towards overall GDP growth.
