Reuters – Egypt’s central bank cut its key interest rates by 50 basis points in a surprise move at a monetary policy meeting on Thursday.
At its last meeting on 31 October, the central bank kept its rates on hold in an effort to balance inflation pressures while the government attempts to stimulate the economy. It had cut rates in August and September by a cumulative 100 basis points.
Seven economists polled by Reuters had expected the bank to leave its rates unchanged.
Egypt’s urban consumer price inflation rose to its highest since July 2011 in October, reaching 10.4 percent, up from 10.1 percent the previous month.
Egypt’s interim government launched a 29.6 billion Egyptian pound ($4.3 bln) stimulus package this year after Gulf countries pledged $12 billion in aid.
The economy grew 2.2 percent in the year to June 30, too slow to make an impact on youth unemployment, estimated at over 20 percent.
The bank cut its overnight deposit rate to 8.25 percent and its overnight lending rate to 9.25 percent. It also cut its discount rate and the rate it uses to price one-week repurchase and deposit operations to 8.75 percent, the bank said in a statement on its website
