CAIRO: The Monetary Policy Committee (MPC) at the Central Bank of Egypt (CBE) raised the overnight deposit rate and overnight lending rate by 100 basis points to 9.25 percent and 10.25 percent, respectively, and the rate of the CBE’s main operation 9.75 percent, according to the CBE’s own homepage Thursday.
“Rising up the interest rate could negatively impact goods’ prices as the cost increases proportionately with the interest rate, and vice versa,” Haitham Abdel Fattah, Director of the treasury sector at the Industrial Development and Workers Bank of Egypt told Al Borsa, pointing out that the prices would witness slight hikes of the surge in interest rates.
“It would be better for the CBE to maintain interest rates, especially with the last hike in goods’ prices over the surge in oil prices,” he added.
The MPC is also considering the gross domestic products besides inflation rates while defining the interest rates, the CBE reported.
Last June, the Consumer Price Index CPI noted a 0.84 percent surge compared to a 0.73 percent decline in May, while the annual rate of inflation remained broadly unchanged at 8.20 percent in June.
During the third quarter of last fiscal year 2013-2014 the GDP edged higher registering, 2.50 percent compared to 1.04 and 1.44 percent of the previous two quarters respectively.
In its previous meeting May 29, the MPC decided to maintain the overnight deposit rate, overnight lending rate, and CBE’s main operations at 8.25 percent, 9.25percent, and 8.75 percent respectively, Al Borsa business daily reported.