The Root Cause of Egypt’s Inflationary Crisis as Revealed by Central Bank Governor

Egypt’s central bank governor Hassan Abdullah said Egypt’s inflation, which reached a record high of 40% in February and then slowed to 39% in March, was imported from abroad.

He attributed this largely to supply issues, not just supply prices, but supply issues, including backlogs that resulted from some of the previous rules, which are not and will not be resolved by interest on their own. rates.

Hassan Abdullah said in a speech during the World Bank Group and International Monetary Fund spring meetings in Washington, D.C. Bloomberg reported today, Friday, that higher interest rates can do little to curb inflation, which he says words, mainly driven by supply issues.

We will not hesitate to do more, but we need to be very careful and the interest rate is not the only tool,” said Hassan Abdullah, the central bank governor.

Egypt’s central bank has already raised interest rates by 10% over the past 12 months.

Abdullah’s remarks came during the World Bank and International Monetary Fund’s spring meetings, and he used his participation to chart an approach beyond monetary policy to combat the fastest inflation Egypt has seen since the fallout from a currency crisis in 2016.

Egypt’s central bank raised its key rate by 200 basis points last March, after policymakers surprised many economists in February by leaving interest rates unchanged.

Hassan Abdullah said that the Central Bank of Egypt will not and will not hesitate to use monetary policy to achieve its inflation target, and what has been done today is very huge and we are ready to do more, but the whole issue needs to be considered. and not just monetary policy.

Source: Cairo 24

Related Stories

Leave a Reply