She emphasized that monetary policy tools are used to control inflation expectations, reduce inflationary pressures from the demand side and the secondary effects of supply shocks, which may lead to relatively higher inflation rates than the targeted inflation rates. She explained that the US Federal Reserve raised the interest rate by 1.5% over the past period, while the CBE took strong proactive steps by raising the interest rate by 3%. She noted that MPC takes into account internal and external conditions and variables before issuing its decision on interest rates. Beltone Financial also expected interest rates to be fixed during the meeting. The company’s research department said, in a research note, that it believes that the full impact of raising interest rates on inflation will take time to fully reflect, expecting CBE to keep interest rates unchanged during Thursday’s meeting, to control inflation rates, with the state of instability the world is currently witnessing.

Source: The North Africa Journal June 26, 2022 09:53 UTC