Interest rates in Egypt .. the central bank meets today amid a state of anticipation

Interest rates in Egypt .. the central bank meets today amid a state of anticipation

The Monetary Policy Committee of the Central Bank holds its meeting today to review interest rates , amid rising inflation and acceleration of the largest monetary tightening cycle The world has witnessed it for decades.

Today’s first meeting is considered the first for the Monetary Policy Committee in Egypt after the recent decision of the US Central Bank to raise prices.

With the high inflation rates and the tightening of monetary policy in America, it is expected that emerging markets around the world, including Egypt, will be exposed to increasing pressures with the high cost of borrowing. Reuters poll this week that the central bank raises interest rates to include a 50 basis point increase in the key operation rate to 11.75%, and a 25 basis point increase in the lending rate to 12.5%. Pascal Defoe, chief economist at BNP Paribas, said, “In the context of the Fed’s tightening policy and the pressure on Egyptian external liquidity, a significant increase in the interest rate at the Central Bank of Egypt is needed in order to recover portfolio flows.”

The Committee on Transport Policy was At its last meeting on May 19, the Central Bank of Egypt decided to raise the overnight deposit and lending rates and the main operation price of the Central Bank by 200 basis points to reach 11.25%, 12.25% and 11.75%, respectively. The credit and discount rate was also raised by 200 basis points to reach 11.75%.

This is the second time that the Central Bank of Egypt raises interest rates during 2022, as the Central By raising interest rates by 100 basis points in an extraordinary meeting on March 21, it also allowed for a correction of the exchange rate by reducing the value of the Egyptian pound against the dollar. Research in Al-Marwa Securities Brokerage, Mina Rafeeq, “Opinions regarding the upcoming decisions of this meeting are different, either by fixing or raising, and the opinion is most likely to stabilize interest rates. Regarding the acceleration of interest rate hikes, Egypt cannot keep pace with the Federal Reserve in raising interest rates significantly.” Interest rates 13.75%.