Egypt’s central bank cut its overnight deposit rate by 50 basis points to 9.5 percent and its overnight lending rate by 100 basis points to 11.0 percent, the bank said .
In a statement, the bank said a narrowing of the corridor to 1.5 percentage points from 2 was appropriate as “the dire prospects for global growth in 2009 are likely to exert further downward pressures on external demand with unfavourable repercussions on the domestic growth outlook”.
The bank last changed its rates in March when it cut both deposit and lending rates by 50 basis points.
The bank said headline inflation in the most populous Arab country declined in April to 11.7 percent from 12.1 percent in March, but that the sharp drop in international commodity prices was not yet reflected in domestic prices due to “downward price rigidities”.
It added that inflation would fll towards the bank’s comfort zone by mid-2009