Overnight Deposit Rate in Egypt
The Overnight Deposit Rate ended 2022 at 16.25%, doubling the 8.25% end-2021 value, and in line with the reading of 8.25% a decade earlier. For reference, the average Overnight Deposit Rate in the Middle East & North Africa region was 5.80% at the end of 2022. For more interest rate information, visit our dedicated page.
Egypt Interest Rate Chart
Egypt Interest Rate Data
2018 | 2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|---|
Overnight Deposit Rate (%, eop) | 16.75 | 12.25 | 8.25 | 8.25 | 16.25 |
Central Bank tightens again in February, taking markets by surprise
At its first scheduled meeting of the year on 1 February, the Central Bank of Egypt (CBE) resumed its tightening cycle; it hiked rates by 200 basis points, bringing the overnight deposit, overnight lending and main operations rates to 21.25%, 22.25% and 21.75%, respectively. The move, which brought the cumulative rate increase since March 2022 to 1,300 basis points, was the first increase since August 2023 and took markets by surprise.
While the CBE noted that headline and core inflation moderated further in December, this was largely due to a high base of comparison. Additionally, December’s data surpassed the Bank’s expectations and remained over three times above the upper bound of the CBE’s 5.0–9.0% target band. The Bank also noted that broad money growth remained above its historical average and that both supply-side pressures and fiscal consolidation measures had continued to fuel inflation. Thus, the CBE assessed risks to the outlook as skewed to the upside and deemed a tighter monetary policy stance necessary to anchor inflation expectations and help consolidate inflation’s downward trend. Regarding activity, the CBE released national accounts data estimates: Annual GDP growth slowed to 2.7% in July–September 2023, down from 2.9% in the prior three months. Moreover, high-frequency data signaled a further slowdown in Q4 2023.
The CBE’s communiqué was void of explicit forward guidance. The Bank once again stated it stood ready to use all available tools to achieve price stability and that the path of the policy rate remained a function of forecast inflation, rather than historical data. In light of the surprise hike, most of our panelists are currently updating their forecasts; those who have already done so see further hikes in calendar year 2024. The next meeting is scheduled for 28 March.
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Egyptian interest rate projections for the next ten years from a panel of 2 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Egyptian interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Egyptian interest rate projections.
Want to get access to the full dataset of Egyptian interest rate forecasts? Send an email to info@focus-economics.com.
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