The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) will be holding eight meetings during 2021 to determine the basic interest rates of the CBE, which is the most prominent indicator of interest rates in Egypt in the short term.
The MPC had reduced interest rates by 4% over three separate meetings this year, in a preemptive step to limit the repercussions of the novel coronavirus (COVID-19) on the Egyptian economy.
The CBE’s interest rates are currently 8.25% for deposit, 9.25% for lending, and 8.75% for credit, debit, and main operation rates.
The MPC will hold its last meeting this year on Thursday to discuss the future of these prices. The rise in inflation during November has made the country’s interest rates’ fate open to speculation.
The current MPC was formed by the CBE’s Board of Directors in January 2020. The Committee is headed by Tarek Amer, Governor of the CBE.
The Committee includes CBE’s deputy governors Gamal Negm and Ramy Abulnaga; and three CBE board members Mohamed Omran, Ashraf El-Araby, and Naglaa El Ahwany. The Committee does not include any representatives of the government, in order to confirm the independence of its decisions.
The MPC convenes every six weeks to set monetary policies and submit economic and financial reports prepared by the Monetary Policy Unit of the CBE.
These reports include the latest local and international developments, and assess all risks associated with the possibility of inflation, before deciding on interest rates, in order to stabilise prices and create a stimulating environment to encourage investment and achieve economic growth.
The committee also monitors internal economic variables, including inflation, interest rates, monetary and credit developments, asset prices, and real sector indicators. It also undertakes the tasks of studying and following up global growth and inflation rates, international interest rates and future expectations.
