Egypt: Central Bank Keeps Key Interest Rates Unchanged

FILE PHOTO: A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo
FILE PHOTO: A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo
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Egypt: Central Bank Keeps Key Interest Rates Unchanged

FILE PHOTO: A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo
FILE PHOTO: A general view of the new headquarters of Central Bank of Egypt, at the New Administrative Capital (NAC) east of Cairo, Egypt December 8, 2023. REUTERS/Amr Abdallah Dalsh/File Photo

Egypt's central bank kept its overnight interest rates steady on Thursday, as expected, saying that while economic growth had slowed, rising non-food inflation had offset a steady decline in food inflation.
The meeting of the central bank's Monetary Policy Committee (MPC) was its first since Egypt signed an $8 billion financial support agreement with the International Monetary Fund (IMF) in March, when it hiked rates by 600 basis points (bps).
The MPC on Thursday left the lending rate unchanged at 28.25% and the deposit rate at 27.25%, it said in a statement.
The hold was widely expected, with only one of 19 analysts in a Reuters poll forecasting that the MPC would lower rates.
Interest rates are still well below the headline inflation rate, which was running at 32.5% in April. Inflation has declined from a record 38% in September.
"Forecasts indicate that inflation has already peaked and thus is expected to moderate in 2024 as inflationary pressures begin to subside," the MPC said in a statement accompanying the interest rates decision.
The MPC said economic growth had slowed to 2.3% in the fourth quarter of 2023 from 4.2% a year earlier and that indicators suggested growth would remain subdued in the first quarter of 2024.
The central bank raised interest rates on March 6 as part of its agreement with the IMF, bringing total increases since the beginning of the year to 800 bps.
As part of the IMF agreement, Egypt allowed its currency to tumble to under 50 to the dollar after having fixed it at 30.85 for a year. The Egyptian pound has since strengthened to about 47.1 to the dollar.



EU States Agree on 14th Sanctions Package Against Russia

The European Union flag inside the atrium during an EU summit at the European Council building in Brussels, Monday, June 17, 2024. (AP Photo/Omar Havana)
The European Union flag inside the atrium during an EU summit at the European Council building in Brussels, Monday, June 17, 2024. (AP Photo/Omar Havana)
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EU States Agree on 14th Sanctions Package Against Russia

The European Union flag inside the atrium during an EU summit at the European Council building in Brussels, Monday, June 17, 2024. (AP Photo/Omar Havana)
The European Union flag inside the atrium during an EU summit at the European Council building in Brussels, Monday, June 17, 2024. (AP Photo/Omar Havana)

European Union countries agreed on a 14th package of sanctions against Russia over its war in Ukraine, diplomats said on Thursday, including a ban on re-exports of Russian liquefied natural gas (LNG) in EU waters.
Belgium, which holds the rotating EU presidency until July 1, said on the X platform that the package "maximizes the impact of existing sanctions by closing loopholes".
Countries debated the new measures for over a month and ultimately watered down one of the Commission's proposals, aimed at preventing even more circumvention, at Germany's prompting, Reuters reported.
The dropped measure would have forced subsidiaries of EU companies in third countries to contractually prohibit the re-exports of their goods to Russia. The EU is keen to stop the flow of dual-use technology such as washing machine chips that could be used by Russia for military purposes.
An EU diplomat said Germany had asked for an impact assessment, and the measure could be included at a later date.
The ban on trans-shipments is the first restriction the bloc has applied to LNG. However, gas market experts say the measure will have little impact as Europe is still buying Russian gas itself, and trans-shipments via EU ports to Asia represent only around 10% of total Russian LNG exports.
The package also tightens measures against the shadow fleet moving Russian oil outside the price cap on Russian crude set by the Group of Seven (G7) nations. EU countries added tankers to the list of sanctioned entities as well as at least two Russian-owned ships moving military equipment from North Korea, diplomats said.
Overall, 47 new entities and 69 individuals were added to the EU sanctions list, bringing the total to 2,200. The package is expected to be formally approved when EU foreign ministers meet on Monday, diplomats said.