(AFP photo)
By Hossam Mounier
The Financial Policy Committee in the Central Bank of Egypt (CBE) decided on Thursday to fix the interest rates in banks operating in the domestic market, according to a statement by the bank.
The deposit rate is fixed at 8.75%, while the loan interest rate is fixed at 9.75%. The committee kept the rates of main operations, credit and discount fixed at 9.25%.
The decision by the Financial Policy Committee was widely expected in light of the bank’s efforts to not increase the burden of domestic debt service, whereby increasing income prices in CBE leads to increasing the income prices of the treasury bills and bonds issued by the state to cover the budget deficit, according to Dalia Wahba, vice chairman of the treasury sector in the Arab Investment Bank (AIB).
Wahba added that the CBE may not raise the main interest rates until the end of the year, especially with official data indicating that inflation rates declined, which may allow the bank to fix the interest rates.
The Financial Policy Committee said that although investments injected into major local projects, like the Suez Canal project, are expected to contribute to economic growth, the decline of gross domestic product (GDP) is expected with the risks facing the recovery of the global economy. The risks are ongoing in the light of challenges facing some countries, like those of the eurozone, in addition to the slow growth of emerging economies.
