Egypt Daily News – Eleven investment banks have agreed that the Central Bank of Egypt will maintain its interest rates during the upcoming sixth meeting of the year. This decision comes in light of a recent slowdown in inflation but aims to manage the impact of rising fuel and electricity prices.
The Central Bank in March raised interest rates by 600 basis points to 27.25% in an extraordinary meeting as a measure to combat inflation, leading to a total increase of 1900 basis points since March 2022.
The banks participating in the survey include notable names such as EFG Hermes, Beltone, Al-Naeem, Zela Capital, CI Capital, Ahli Pharos, Mubasher Financial, Thndr, Arab African International Securities, Cairo Capital, and HC.
Mohamed Abu Basha, chief economist at EFG Hermes, has ruled out the possibility of a rate cut at the upcoming meeting, citing persistently high inflation rates, despite a recent decline.
According to data from CAMPAS, inflation in Egyptian cities decreased for the fifth consecutive month in July, falling to 25.7% year-on-year from 27.5% in June. On a monthly basis, the consumer price index showed a significant reduction, with a 0.4% increase in July compared to a 1.6% rise in June.
As a result of this decline in inflation, Egypt’s real interest rate—calculated by subtracting the inflation rate from the nominal interest rate—has risen to 1.55%, moving out of the negative territory for the first time since January 2022.
