The Central Bank of Egypt announced a 600-basis-point emergency increase to its overnight deposit rate on 6 March 2024, lifting the benchmark to 27.25% while simultaneously allowing the exchange rate of the Egyptian pound to be determined by market forces under a set of measures tied to an International Monetary Fund-supported programme. The pound depreciated on the move, trading at approximately EGP 49 per US dollar following the announcement.
The overnight lending rate was set at 28.25% as part of the same package. The moves came after negotiations with the IMF over a revised and expanded support package.
CURRENCY FLOAT AND IMF PROGRAMME
The central bank's press release stated that the measures were taken in the context of a comprehensive economic programme.