Egypt Just Introduced a Flexible Exchange Rate System! 📢
On the 6th of March 2024, the Central Bank of Egypt raised interest rates and adopted a market-driven exchange rate system.
Key Points:
- The Central Bank of Egypt raised its policy interest rate by 600 basis points to 27.75%.
- The overnight deposit and lending rates were also increased by 600 basis points to 27.25% and 28.25% respectively.
- These measures are expected to improve Egypt’s external funding position, help end the parallel market in currency exchange, increase foreign investments, and slow inflation.
- Economists view these measures as signals of government’s pursuit of securing another International Monetary Fund (IMF) financing package.