afrol News, 30 July - The Egyptian central bank has reduced its interest rates to the lowest in three years in trying to arrest the effects of the economic slowdown as well as the inflation pressure.

The bank published in its statement the new rates which are said to be the fifth consecutive time reduction this year. The deposit rate has been cut to 8.5 percent while the lending rate was reduced to 10 percent, the bank said in a statement.

The bank also projected a continued downside domestic growth outlook, though saying the inflationary pressures are subsiding.

Egypt’s inflation reached 25.6 percent about a year ago but lowered down to 10 percent by May this year according to reports.

According to the latest government figures, economic growth had slowed to 4.7 percent in the country by June from an average of 7 percent in the past three years.

At its recent conclusion of a visit in Cairo, the International Monetary Fund (IMF) stated that Egypt had weathered the impact of the global financial crisis relatively well, stating: “ Financial contagion was contained by limited direct exposure to affected products and low levels of financial integration, but Egypt has been more susceptible to the real spillovers of the global slowdown.”

The mission also noted that fiscal and monetary policy actions helped cushion the impact of the global slowdown on economic activity in Egypt. “The government undertook a package of additional (mainly infrastructure) expenditures to help support economic activity,” stated the mission, while also citing that the Central Bank of Egypt (CBE) eased monetary policy appropriately, cutting policy rates four times by a cumulative 250 basis points since early 2009.

By staff writer

© afrol News

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