Central Bank raises interest rate by 2%

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On Thursday, after its Monetary Policy Committee’s meeting, the Central Bank announced that it would raise the interest rate by 200 basis points, on lending and depositing, to 12.25% instead of 10.25% and 11.25% instead of 9.25%, respectively.

The Central Bank issued a statement justifying the decision as part of a global context characterized by central banks tightening monetary policies by raising interest rates in the hope of curbing rising inflation rates.

The Governor of the Central Bank, Tariq Amer, also confirmed that the bank would continue its monetary tightening policies during the coming period. The decision is the second of its kind, two months after the Central Bank raised the interest rate last March by 1%. This comes two weeks after the US Federal Reserve decided to raise the benchmark interest rate on the dollar by half a percentage point.

Inflation rates reached their highest level in three years, recording about 15% on an annual basis in April. The International Monetary Fund expected this to continue during the current year and the next.