Cairo – Mubasher: The Central Bank of Egypt (CBE) is expected to further slash key interest rates again this year by around 200 basis points.
The CBE’s recent interest rate cut is a “welcome relief” following the floatation of the Egyptian pound, senior economist at HSBC Bank Middle East Razan Nasser said in Bloomberg Television interview.
Raising the benchmark interest rates by 700 basis points post the currency float decision has pushed the debt to make up a third of the country’s general spending, Nasser added.
Shrinking the Arab nation's key interest rates have also been reflected in the purchasing managers' index (PMI) reading in March, which dropped to 49.2 despite the slight rise of prices in the non-oil private sector, she noted.
She warned that inflation still poses a risk to the Egyptian economy. “We shouldn’t get complacent,” she remarked.
Nasser emphasised that Egypt’s economic growth rate has been remarkably impressive, but it still needs more reforms.
On 29 March 2018, the CBE had cut key interest rates for the second time this year by 100 basis points or 1%.
The overnight deposit and lending rates stood at 16.75% and 17.75%, respectively, while the main open market rate was reduced to 17.25%.
