On Thursday, the Central Bank of Egypt (CBE) announced a two percent (200 bps) increase in key interest rates, the first of 2023, in an effort to manage soaring inflation. The CBE said that the overnight deposit rate, overnight lending rate, and main operation rate would all increase by 200 bps to 18.25 percent, 19.25 percent, and 18.75 percent, respectively, while the discount rate would also be raised to 18.75 percent.
This increase was in line with analysts’ predictions, who anticipated a hike of between two and three percent, given record inflation figures in Egypt. The CBE explained that supply chain disruptions, the depreciation of the Egyptian pound, demand side pressures, and high broad money growth out-turns, among other factors, were contributing to this inflation.