Waiting to See New Certificates in Egypt Banks

Economic analyst and financial adviser Mohamed Abdel-Wahhab expected the Central Bank of Egypt to raise interest rates at a meeting of the Monetary Policy Committee tomorrow, Thursday.

Abdel-Wahhab expected interest rates to rise from 200 to 300 basis points due to inflation rising to 40% and the Central Bank’s attempt to curb inflation by continuing monetary tightening, especially since the bank did not raise interest during its last meeting.

Egyptian consumer prices jumped 31.9% year-on-year in February from 25.8% in January, the highest level since August 2017, when they hit 31.9%, according to a statement from the Central Agency for Public Mobilization and Statistics. on an annualized basis. time. Monthly; Inflation reached 6.5%, the highest level since March 2007.

Core inflation, which excludes the most volatile commodity prices, jumped to 40.3% in February from 31.2% in January to its highest level ever, according to central bank data released Thursday.

Abdel-Wahhab expected that state-owned banks would be inclined to issue 25% certificates again to limit liquidity in the market, especially with the expiration of 18% certificates estimated at around 750 billion Egyptian pounds in revenue, indicating that allowing them exit banking sector will have a significant impact on the rise in inflation.

The central bank raised interest rates by 8% by about 800 basis points during 2022 to absorb the wave of inflation and attract foreign investment in foreign currency for government debt after about $22 billion is issued. after the Russian-Ukrainian crisis.
And the Monetary Policy Committee of the Central Bank at its first meeting in 2023 in January decided to fix overnight interest rates on deposits and loans and the price of the main transaction at 16.25%, 17.25% and 16.75. %, respectively, and it was also decided to fix the credit rate. And the discount is 16.75%.

The Monetary Policy Committee will meet again tomorrow, Thursday, for its second meeting for 2023, to decide on interest rates in light of the global economic turmoil and unprecedented domestic inflation.

Source: Cairo 24