HC expects CBE to keep interest rates on hold

HC Securities & Investment expects the Central bank of Egypt (CBE) to keep interest rates unchanged at its Monetary Policy Committee (MPC) next April meeting.

Monette Doss,  the Chief Economist at HC Securities & Investment commenting  the MPC  next meeting benchmarked  Egypt  against Turkey, which is expected to  have  a real yield of 4 percent on 19-month treasuries compared to to a real yield of 3.9 percent on Egypt’s 12M T-bills.

She added, “given a 15% tax rate for US and European investors and our inflation forecast of 7.5% over the next 12 months.”

She also noted that inflation has risen only slightly during the first quarter despite a backdrop of rising global commodity prices. The annual urban rate has increased from 4.3 percent in January to reaching 4.5 percent  in March.

This figure is still short of the central bank’s 7 percent (± 2 percent) target range, she pointed out