Overnight Lending Rate

The Overnight Lending Rate is announced by the Central Bank of Egypt (CBE). It is the interest rate at which banks can borrow funds from the CBE overnight to meet their reserve requirements or to cover any short-term funding gaps. A rise in this rate makes it more expensive for banks to borrow funds, which can lead to a reduction in the supply of money in the banking system, leading to an increase in the demand for the Egyptian Pound (EGP). Otherwise, if the CBE decides to lower the Overnight Lending Rate, it usually will trigger a bearish reaction on the EGP.