The Central Bank of Egypt issues the interest rate decision…a big change, stronger than expectations, by

© Reuters. – Moments ago, the Central Bank issued a much-anticipated meeting following the signing of the final $3 billion International Monetary Fund loan agreement with Egypt.

Today, Thursday, the Central Bank of Egypt decided to raise interest rates by 300 basis points. The interest on overnight deposits rose to 16.25% from 13.25%, while the bank raised the overnight lending rate to 17:25% from 14:25%.

The central bank aims to achieve price stability in the medium term, and in parallel with the central bank’s previous announcement of targeting inflation rates on a downward path, the target inflation rates were set during the coming period at the level of 7% on average during the fourth quarter of 2023 and the level of 5% on average during the quarter. 4th of 2026.

pound today

The Egyptian pound stabilized in the official exchange market, against the end of Thursday’s trading, at the levels of the day before yesterday, Tuesday, as the pound recorded a single decline, within the limits of 3 piasters, during 7 consecutive days.

Today, Thursday, the official price screen of the Central Bank of Egypt revealed the stability of the pound against the dollar, with the selling price recording levels of 24.7653 pounds per dollar, while the purchase price recorded levels of 24.6865 pounds per dollar. In the national banks, the National Bank of Egypt and Banque Misr, the exchange rate of the dollar stabilized at levels of 24.69 pounds per dollar for sale and levels of 24.64 pounds per dollar for purchase. In private banks, Al-Masry Al-Khaleeji, Abu Dhabi Islamic Bank, Mashreq Bank, Al-Ahly of Kuwait (Piraeus), and Commercial International (CIB), the selling price recorded 24.75 pounds per dollar, while the purchase price recorded 24.72 pounds per dollar.

Black market

The exchange rate on the black market fell after the signing of the fund’s loan, down to 29 pounds per dollar, compared to 38 pounds per dollar before the signing.

Before signing, it exceeded levels of 33 pounds per dollar, amid a fierce state of speculation, in light of expectations of a third flotation of the local currency.

Pre-decision predictions

Market experts expected the Central Bank of Egypt to raise the interest rate on overnight deposits by 200 basis points today, Thursday, as part of its attempts to curb soaring inflation after the sharp decline in the value of the local currency.

Average expectations indicated that the Central Bank of Egypt would raise interest rates on deposits to 15.25% and lending interest to 16.25% at the periodic meeting of the Monetary Policy Committee.

The central bank raised interest rates by 200 basis points in a surprise meeting held on October 27th and on the same day, the local currency depreciated 14.5%.

Egypt’s headline inflation rate jumped to a five-year high of 18.7 percent in November, up from 16.2 percent in October.

The central bank said after last October’s meeting that prices will continue to exceed the target range for inflation of 5-9 percent during the fourth quarter.

proactive decisions

In a surprising decision by the Egyptian banks, one hour before the meeting of the Central Bank, the national banks decided to raise the commission rate on cash withdrawals of dollars outside Egypt.

A number of banks announced the amendment of cash withdrawal limits in foreign currencies on all cards, as of yesterday, with the amendment of limits and restriction of the use of cards to some purchases from abroad.

Last Sunday, the Central Bank of Egypt sent a letter to the banks under its regulatory umbrella, in light of the violent fluctuations in the country’s markets, which resulted in prices reaching unprecedented levels.

According to the directives of the Central Bank, in the event that the proceeds of export operations related to gold are not received within a maximum period of 7 working days from the date of shipment, and after the bank follows up on the customer for only the next 3 working days, it must inform the Central Bank.

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