Thursday, September 19, 2013

Egypt cuts rate by 50 bps for second month in a row

    Egypt's central bank cut its benchmark overnight deposit rate by another 50 basis points to 8.75 percent, its second rate cut in two months.
    The Central Bank of Egypt (CBE) also cut the overnight lending rate by 50 basis points to 9.75 percent, the rate on its main operations to 9.25 percent and the discount rate to 9.25 percent. The CBE did not immediately issue an explanation for its policy decision.
    The CBE last cut its rate in August, reversing a rate rise in March due to inflationary pressures. The CBE has now cut rates by a net 50 basis points this year.
    In August the central bank said the downside risks to growth were outweighing the upside risks to inflation. Egypt's economy has been hit hard by political unrest.
    Egypt's inflation rate eased to 9.74 percent in August from 10.28 percent in July while its economy expanded by an annual 2.2 percent in the first quarter, the same as in the fourth quarter.


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