Egypt’s central bank raises interest rates by 6%, allows market forces to set EGP exchange

The Central Bank of Egypt (CBE) decided on Wednesday morning to adopt a flexible exchange rate regime for the Egyptian pound (EGP) and allow market forces to determine its value, in an unforeseen move.

Also, the Central Bank of Egypt raised the overnight deposit rate, the overnight lending rate, and the rate of the main operation by 600 basis points to reach 27.25 percent, 28.25 percent, and 27.75 percent, respectively. Additionally, the discount rate has been raised by 600 basis points to 27.75 percent. This marked the second hike of the year.

This was decided by the Monetary Policy Committee (MPC) of the Central Bank of Egypt in a special meeting this morning.

Following this news, the average exchange rate reached EGP47.1/USD from EGP30.9/USD at the time of writing.