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    MPC Press Release February 3 2022

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    Ebtsam Mohamed
    The Monetary Policy Committee decided to keep interest rates unchanged as annual headline inflation increased to 5.9% in December 2021 due to higher commodity prices and fiscal measures. Domestic economic activity grew strongly in 2021 Q3 at 9.8%, its highest rate since 2001/02, driven by domestic demand and investments. Unemployment stabilized around pre-COVID levels as employment increased offsetting gains in the labor force. Global economic recovery shows signs of slowing due to supply disruptions while commodity prices, especially oil, continue rising. The MPC will keep rates unchanged to achieve a 7% inflation target by 2022 Q4.

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    MPC Press Release February 3 2022

    Uploaded by

    Ebtsam Mohamed
    8 views2 pages
    The Monetary Policy Committee decided to keep interest rates unchanged as annual headline inflation increased to 5.9% in December 2021 due to higher commodity prices and fiscal measures. Domestic economic activity grew strongly in 2021 Q3 at 9.8%, its highest rate since 2001/02, driven by domestic demand and investments. Unemployment stabilized around pre-COVID levels as employment increased offsetting gains in the labor force. Global economic recovery shows signs of slowing due to supply disruptions while commodity prices, especially oil, continue rising. The MPC will keep rates unchanged to achieve a 7% inflation target by 2022 Q4.

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    MPC Press release February 3 2022

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    The Monetary Policy Committee decided to keep interest rates unchanged as annual headline inflation increased to 5.9% in December 2021 due to higher commodity prices and fiscal measures. Domestic economic activity grew strongly in 2021 Q3 at 9.8%, its highest rate since 2001/02, driven by domestic demand and investments. Unemployment stabilized around pre-COVID levels as employment increased offsetting gains in the labor force. Global economic recovery shows signs of slowing due to supply disruptions while commodity prices, especially oil, continue rising. The MPC will keep rates unchanged to achieve a 7% inflation target by 2022 Q4.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    8 views2 pages

    MPC Press Release February 3 2022

    Uploaded by

    Ebtsam Mohamed
    The Monetary Policy Committee decided to keep interest rates unchanged as annual headline inflation increased to 5.9% in December 2021 due to higher commodity prices and fiscal measures. Domestic economic activity grew strongly in 2021 Q3 at 9.8%, its highest rate since 2001/02, driven by domestic demand and investments. Unemployment stabilized around pre-COVID levels as employment increased offsetting gains in the labor force. Global economic recovery shows signs of slowing due to supply disruptions while commodity prices, especially oil, continue rising. The MPC will keep rates unchanged to achieve a 7% inflation target by 2022 Q4.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Press Release

    February 3rd, 2022

    The Monetary Policy Committee (MPC) decided to keep the Central Bank of Egypt’s (CBE)
    overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged
    at 8.25 percent, 9.25 percent, and 8.75 percent, respectively. The discount rate was also kept
    unchanged at 8.75 percent.

    Annual headline inflation increased to 5.9 percent in December 2021 from 5.6 percent in
    November 2021, resuming its upward trend since May 2021. The upward trend was driven by
    unfavorable base effects resulting from the low inflation levels that were recorded in the second
    half of 2020, as well as higher international commodity prices and various fiscal consolidation
    measures. Furthermore, annual inflation developments in December 2021 in specific were
    affected by the reversal of a short-lived tomato supply shock witnessed during December 2020.
    In addition, annual core inflation increased for the fourth consecutive month in December 2021
    to record 6.0 percent from 5.8 percent in November 2021, partly affected by unfavorable base
    effects which reflect the muted inflationary pressures during December 2020. The increase was
    also driven by the higher annual contribution of services and retail items.

    Domestically, economic activity extended its robust recovery in 2021 Q3, recording a preliminary
    figure of 9.8 percent, the highest real GDP growth rate since the beginning of the quarterly series
    in fiscal year 2001/02. Furthermore, growth on an annual basis was amplified by the return of
    normalcy in economic activity compared to the corresponding period last year, which witnessed
    the gradual lifting of COVID-19 containment measures. Over the near-term, domestic economic
    activity is expected to be mainly driven by domestic demand, and in specific, gross domestic
    investments. Additionally, leading indicators point towards a continued expansion across most
    economic sectors.

    Regarding the labor market, the unemployment rate broadly stabilized in 2021 Q3, hovering
    around its pre-COVID 19 level. The witnessed stability stemmed from the increase in
    employment, largely offsetting the increase in the labor force.

    Global economic activity continues to recover from the COVID-19 pandemic, but has shown some
    signs of slowdown due to global supply chain disruptions. Additionally, prospects of global
    economic recovery remain contingent on the efficacy of vaccines and the ability of countries to
    contain the spread of the virus, in light of the emergence of new variants. Global financial
    conditions remain broadly accommodative but are expected to tighten over the medium-term as
    monetary policy is expected to normalize sooner than was projected. International prices for oil
    have continued to increase, recording the highest level since the outbreak of the pandemic.
    Concurrently, international prices for select mineral commodities have begun to increase.

    Against this background, the MPC decided that keeping policy rates unchanged remains
    consistent with achieving the inflation target of 7 percent (±2 percentage points) on average in
    2022 Q4 and price stability over the medium term.

    The MPC closely monitors all economic developments and will not hesitate to utilize all available
    tools to achieve its price stability mandate.

    Monetary Policy Sector


    [email protected]

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