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CBE will discuss future of interest rate on EGP - Daily News Egypt

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CBE will discuss future of interest rate on EGP

According to analysts, MPC is highly expected to keep the major interest rates at CBE unchanged for the sixth consecutive time during its meeting decided set for Thursday.


 

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) will hold its seventh regular meeting this year on Thursday to make a decision about the major interest rates, which are used to determine the interest rates at banks operating in the local market.

MPC decided in five out of its six previous meetings to keep the major interest rates at CBE unchanged at 8.75% for the overnight deposit and 9.75% for the overnight lending. Both the rate of CBE’s main operations and the discount rate were also kept unchanged at 9.25%. That was decided in their meetings in February, April, June, July, and September.

According to analysts, MPC is highly expected to keep the major interest rates at CBE unchanged for the sixth consecutive time during its meeting decided set for Thursday.

MPC confirmed in its previous statements that investments in local mega projects, like the Suez Canal development, are expected to increase the economic growth. The decline in the GDP growth rate could occur as a result of the risks of the ongoing recovery of the global economy, under the challenges with some European countries and the softening growth in the emerging economies.

“MPC is expected to keep the interest rates at CBE unchanged, like it did in February, April, June, July, and September”, said Dalia Wahba, Vice Chairman of the treasury sector in the Arab Investment Bank.

She said they are going through a transitional phase now, with a new CBE’s governor, and under such circumstances the important decisions, such as deciding the interest rate on the Egyptian pound, are usually not taken.

Wahba ruled out that CBE will resort to increase the interest rate, especially since inflation is expected to decline. The state is significantly keen on activating investments, pushing the economy forward, and not burdening the country’s general budget more.

CBE announced that the annual rate of the core inflation was stable in September 2014 without change, at 5.55% compared to August 2014. The monthly core inflation rate increased by 0.79% in September, compared to a decline of 0.23% in August.

According to  Wahba, CBE’s new governor Tarek Amer is facing a big challenge in regard to the interest rates.

She said CBE demanded to decrease EGP’s interest to activate the investment and decrease the cost of the local public debt. They also demanded to increase the interest rate to maintain the value of the EGP against the foreign currencies, especially the dollar, and to maintain the return on the citizens’ savings, especially those who use that return to meet their major needs.

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https://dailyfeed.dailynewsegypt.com/2015/10/27/cbe-will-discuss-future-of-interest-rate-on-egp/
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