By Menna Zaki
The general monetary policy trend in the MENA region is expansionary and will remain so in attempts to face the inflation rates, Emirates NBD said Monday.
NBD reported that Egypt’s total credit growth has remained in the double digits (20.7% year on year as of January), unlike Tunisia and Jordan, where total credit growth decreased to 7.2% year on year and 8.6% this February compared to 13.5% and 15.3% in February 2012.
Private credit growth in Egypt fell at a faster pace in January than it has since March 2010. The public sector expanded 30.4% year on year as of January, while private sector credit increased only 5.4%, masking a “sharp discrepancy between loans to the public and private sectors”.
The Central Bank of Egypt (CBE) announced plans last month to keep official interest rates steady to balance the increasing annual inflation rate, sluggish economic activity, low investment levels, and a negative GDP outlook.
The Monetary Policy Committee said that the current rates are “appropriate” given the high prices of several food items, which led to the increase of inflation rates in the first quarter of 2014, according to the CBE.
The annual inflation rate recorded 10.2% in March, adding that general food prices and beverages registered a month on month increase of 1.3% and a year on year increase of 15.8%, according to the Central Agency for Public Mobilization and Statistics.