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18 March 2020
ECONOMY

Egypt cuts key interest rates to ease the impact of Covid-19

Egypt’s rate cuts come a day after the US Federal Reserve unexpectedly cut its benchmark by a full percentage point to near zero

The government has allocated EGP 100 billion ($6.4 billion) to combat the coronavirus, without specifying what the funding will go toward/Bloomberg

by Bloomberg

Egypt has slashed its key interest rates by the most ever in an emergency meeting, signalling the central bank is less focused on the risk of outflows as the North African nation races to limit the economic impact from the global coronavirus outbreak.

The Central Bank of Egypt’s (CBE) Monetary Policy Committee reduced the overnight deposit rate by 300 basis points to 9.25 per cent and the lending rate to 10.25 per cent. The regulator trimmed rates a combined 450 basis points in 2019.

Egypt, which has offered investors the world’s second-most profitable carry trade this year, is joining a parade of rate cuts around the world as countries look to deploy stimulus and slow the spread of the coronavirus.

Gulf nations, including Saudi Arabia, Kuwait, Bahrain and the UAE also following the Fed’s decision

Bloomberg reported that Egypt, where the tourism industry is vital to the economy, has announced its halting flights from the nation’s airports until the end of the month to stem cases of the illness.

The government has allocated EGP 100 billion ($6.4 billion) to combat the coronavirus, without specifying what the funding will go toward.

The central bank unveiled a range of measures to protect the economy. It’s giving businesses and individuals a six-month extension for credit repayments and cancelling ATM withdrawal fees for the same period.


RELATED STORIES: US Federal Reserve Central Bank of Egypt Covid-19

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