Egypt likely to maintain interest rates – Bloomberg

Egypt is expected to maintain interest rates at a record high, aiming to curb inflation before initiating its first monetary easing since 2020. According to a Bloomberg survey, 10 out of 11 economists predict the central bank will keep the benchmark deposit rate at 27.25 per cent on Thursday, with Bank of America being the only exception, forecasting a 25 basis point cut.

This decision follows Egypt’s consumer price index dropping to 25.5 per cent in November, its lowest in nearly two years. The IMF recently completed its fourth review of Egypt’s programme, unlocking a potential $1.2 billion loan tranche.

Economists expect the central bank to hold off on rate cuts until at least the end of the first quarter of 2025, in line with the bank’s September statement that rates will stay high until inflation significantly declines.

Further inflationary pressures could arise from a weakening of Egypt’s pound, which recently fell to a record low of 50 per dollar. Goldman Sachs forecasts a possible rebound in the pound in 2025, driven by reduced outflows and new bond issuances.

Attribution: Bloomberg

Subediting: M. S. Salama