CAIRO: Egypt’s central bank monetary policy committee made no decision on interest rates at its Thursday meeting and said it would reconvene on Dec. 24 following consultations with the government on inflation and growth.
The announcement came as a shock to the markets, which had been watching to see if Egypt would follow the lead of the U.S. Federal Reserve, which raised its key interest rate on Wednesday to a range of 0.25 to 0.5 percent.
Egypt, which depends on imported food and energy, is facing a dollar shortage and mounting pressure to devalue the pound.
The U.S. rate increase is likely to put more pressure on the pound unless the central bank follows suit. But Egyptian interest rates are already high and the bank has held back so far for fear of choking off investment and growth and increasing the government’s already substantial debt servicing cost.
An announcement on Egypt’s benchmark lending and deposit rates had been scheduled for later on Thursday.
The central bank said in a statement that the first meeting of its coordination council, which includes several ministers and independent economic experts, would take place later on Thursday.
The central bank “is keen on fulfilling its mandate of price stability for the purpose of sustainable economic growth and job creation,” it said in a statement.
“This mandate is only achievable through full coordination and commitment on macroeconomic objectives with the government, including targets for fiscal consolidation, current account outturns and the implementation of urgent structural economic reforms.”
The monetary policy meeting was the first under the central bank’s new governor, Tarek Amer, who has led a recent drive to indirectly support the Egyptian pound and supply banks with dollar liquidity despite dwindling foreign reserves.
At its last meeting, on Oct. 29, the central bank kept its overnight deposit rate at 8.75 percent and its lending rate at 9.75 percent, for the sixth consecutive time.