CAIRO – Board Chairman of the Egyptian Federation for Construction and Building Contractors (EFCBC) Mohamed Samy Saad said the decision of the Central Bank of Egypt (CBE) to increase the interest rate was necessary to counter any hike in the state’s inflation rates.
He said the decision comes in response to recommendations issued by Egypt Economic Conference 2022 and visions of the business community and investors in light of the dollar availability crisis.
Saad said increasing the dollar interest rate would support and accelerate money transactions from abroad, adding that all the economic sectors was awaiting such decisions.
Earlier in the day, he Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) has raised the key interest rates in an unscheduled meeting by two percent (200 bps) to reach 13.25 percent, 14.25 percent, 13.75 percent, and 13.57 percent for the overnight deposit rate, the overnight lending rate, the rate of the main operation, and the discount rate, respectively.
n a statement released on Thursday morning, the CBE attributed its decision action to elevated global and domestic prices that are expected to keep headline inflation above the MPC’s preannounced target of seven percent (±2 percent) on average in through the fourth quarter of 2022.
The decision aims to uphold the CBE’s mandate of ensuring price stability in the local market over the medium term, the statement noted.
It also aims to anchor inflation projections and also to contain demand side pressures and higher broad money growth as well as the second round effects of supply shocks.
The CBE also announced in the statement that it will begin a process of phasing out letters of credit (LCs) for import finance by December 2022.
Discussion about this post