Cairo – Mubasher: Incentivised by the Fed's announced patience policy regarding any hike in interest rates, Egypt is about to conduct what may be the deepest interest rates cuts in the world, Bloomberg reported.
Earlier in March, the Federal Reserve decided to maintain interest rates between 2.25% and 2.5%. The Fed based its decision on economic stability and lower inflation, pledging balance sheet reduction.
The North African country is expected to reduce interest rates by 100 basis points, a group of economists told Bloomberg.
“The central bank is still a long way from unwinding rate increases that it deployed to steady the pound and battle inflation after floating the currency in November 2016,” the US-based news website said.
In December, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided in its meeting to maintain the current interest rates unchanged.
Overnight deposit rate and overnight lending rate were maintained unchanged at 16.75%, and 17.75%, respectively.
Egypt may see higher inflation with the beginning of Ramadan and the liberation of 95-Octane gasoline, senior economist at Shuaa Securities Esraa Abd Al-Majeed remarked.
In February, the Egyptian Cabinet spokesperson Nader Saad stated that the country was planning to lift subsidies on 95-Octane gasoline as of April.
