A cut in interest rates will improve the investment climate, create job opportunities, increase the private sector’s activities and help the state budget save up to EGP15 billion (USD906 million), An Egyptian government statement said on Sunday.
Egypt expected earlier debt interests to reach EGP541.747 billion (USD33 billion) in FY 2019-2020 compared to EGP437.448 billion (around USD26 billion) in the previous fiscal year.
Last month, the Central Bank of Egypt (CBE) cut the overnight deposit rate by 150 basis points to 14.25 percent.
The overnight lending rate was cut by 150 basis points to 15.25 percent, the bank said in a statement.
The cabinet’s press office clarified Sunday that the CBE reduced the interest rates after both the inflation and employment rates dropped respectively to 8.7 percent in July 2019 and 7.5 percent in Q2 of 2019.
It also mentioned that the deposit interest rates in Egyptian banks increased to 5.59 percent in August 2019, compared to 13.2 percent in August 2017.
The statement noted that Bloomberg praised slowing inflation and a stable currency, which compelled Egypt to cut interest rates for the first time in six months.
Further, Credit Suisse Group AG hailed CBE’s latest decisions that have made the Egyptian stock exchange more appealing to investors.