The Monetary Policy Committee at the Central Bank of Egypt (CBE) will hold its regular meeting today to discuss whether to change interest rates or keep them unchanged. MPC has left overnight deposit and lending rates unchanged at 9.25% and 10.25% respectively, as well as repo rates at 9.75% and credit and discount rates at 9.5% seven times.
Bankers expected MPC to keep interest rates unchanged for the eighth time in a row as there is no need for raising or lowering interest rates. They warned that if CBE raises interest rates, borrowing costs and returns on government debt instruments will surge, increasing local debt burdens which exceeded EGP one trillion.
Osama El Manialawy, assistant general manager of the treasury department at Société Arabe Internationale de Banque (SAIB), expected the Monetary Policy Committee to leave interest rates unchanged because there are no changes and the economic and political views are not clear.
Asked about the impact of the inflation rate which reached 6.70% last October, compared to 6.22% in September, El Manialawy noted that the inflation level is not the main factor affecting interest rates. Inflation rates sometimes change without affecting interest rates, he affirmed.
Amid the current conditions, CBE has to leave interest rates unchanged especially that there is no lack of liquidity, he noted.
