By: Noha Al-Nahhas
Cairo - Mubasher: Analysts are expecting the monetary policy committee of the Central Bank of Egypt (CBE) to maintain interest rates in its next meeting on Thursday.
Last November, the CBE raised interest rates by 300 basis points (3%) and kept it unchanged in the committee’s last meeting on 29 December, with the main open market operation rate at 15.25%, and at 14.75% for overnight deposits and 15.75% for overnight lending.
Economic analyst Reham El Desouky of Arqaam Capital, ruled out raising interest rates in today’s meeting, as it will not be affecting inflation rates, she added.
The current hike in inflation is attributed to special factors regarding the cost of production, not supply and demand, El Desouky explained.
The data of the Egyptian Central Agency for Public Mobilization and Statistics (CAPMAS) recently showed a 29.6% jump in the consumer price index last month.
MubasherTrade Research said in a previous report that the Egyptian economic reform program relies on maintaining proper interest rates to avoid a surge in prices, adding that the surge in inflation comes as a result of an increase in production costs and not from higher demand.
MubasherTrade also noted that as per the agreement with the International Monetary Fund (IMF), the Egyptian government is obliged to monitor liquidity levels to avoid more inflationary pressures.
Pharos Research expects the CBE to maintain interest rates, despite the surge in inflation rates.
Similarly, Prime Research also forecasts the CBE will maintain overnight deposit and lending rates at 14.75% and 15.75% respectively.
Contrary to consensus expectations, Capital Economics expects the central bank to raise interest rates by 100 basis points, due to the huge increase in inflation rates.
Translated by: Moslem Ali
