Egypt’s central bank cuts interest rates by 1%

The Egyptian central bank on Thursday cut its main interest rates by a percentage point each (100 basis points) – the first time it has lowered the rates since floating the currency in 2016.

The bank cut its overnight deposit rate to 17.75 percent from 18.75 percent and its overnight lending rate to 18.75 percent from 19.75 percent.

“(The cut) remains consistent with tight real monetary conditions; a necessary requirement to achieve the inflation target of 13% (±3 percent) in Q4 2018 and single digits thereafter,” the bank said in a statement.

"Inflationary pressures have been contained, a consequence of tighter real monetary conditions. This has been evident by relatively tame monthly inflation figures, despite being affected by upward adjustments of regulated prices," read the statement.

Inflation had dropped for the sixth consecutive month in January, with annual rate falling to 17.1 percent and core inflation easing to 14.35 percent.

“Favorable base effects have been accelerating the decline of annual inflation rates since November 2017,” the statement said.