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Egypt's central bank left its benchmark interest rates steady, saying this would be consistent with achieving its inflation target following the 300 basis point rate cut at an unscheduled monetary policy meeting on March 16.


The Central Bank of Egypt (CBE) left its overnight deposit rate at 9.25 percent, the overnight lending rates at 10.25 percent, and the rate on its main operation and discount rate at 9.75 percent.

The decision was largely expected by analysts, with Egypt's inflation rate easing to 5.3 percent in February from 7.2 percent in January on favorable base effects and contained inflationary pressures, CBE noted.


CBE targets inflation of 9 percent, plus/minus 3 percentage points in the fourth quarter of this year and price stability over the medium term.


Egypt's tourism sector has been hit hard by the spread of the coronavirus and the associated containment measures worldwide and CBE said its rate cut on March 16 was a pre-emptive move to support economic activity, especially within households and businesses, and support employment, which is "essential in order to avoid a prolonged slowdown in economic activity and help speed the recovery once the outbreak is contained."


Egypt's economy grew 5.6 percent in the third quarter of 2019 year-on-year, down from 5.7 percent in the second quarter.

 

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