Central Bank of Egypt Cuts Rates

At its December 5th meeting, Central Bank of Egypt decided to cut the overnight deposit rate by 50 bps to 8.25 percent. It is the third rate cut his year, citing pronounced downside risks to growth. The discount rate was also cut by 50 basis points to 8.75 percent.

Excerpt from Central Bank of Egypt' press release:

While upside risks to the inflation outlook continue to moderate as the possibility of a rebound in international food prices is unlikely in light of recent global developments, annual inflation could increase above their current levels in November and December, despite of the expected seasonal slowdown in the monthly rates (unfavorable base effect).  

Looking ahead, downside risks that surround the global recovery on the back of challenges facing the Euro Area and the softening growth in emerging markets could pose downside risks to domestic GDP goingforward. The pronounced downside risks to domestic GDP combined with the persistently negative output gap since 2011 will limit upside risks to the in?ation outlook going forward. Given that the downside risks to the GDP outlook outweigh the upside risks to the inflation outlook, the MPC decided to cut the key CBE rates.  

Central Bank of Egypt Cuts Rates

Central Bank of Egypt | Joana Taborda | joana.taborda@tradingeconomics.com
12/5/2013 7:16:54 PM