CBE’s MPC Meeting to Discuss Interest Rates

Central Bank of Egypt’s Monetary Policy Committee shall hold its periodic meeting today, headed by CBE’s governor Hisham Ramez, in order to discuss the interest rate, whereas MPC decided, on its meeting in last February, to fix the interest rate on deposit at 9.75%, on lending at 10.25% and on buybacks and debt and credit rates at 10.25%.

Bankers predict that CBE shall resort to fix the interest rate as they are anticipating the aftermath of 30 June protests and its impact on the Egyptian economy and especially on the inflation, the central bank’s top priority; whereas Egypt’s opposition called for massive nationwide protests on 30 June to demand early elections and to overthrow President Mohamed Morsi.

Amr Youssef, deputy of treasury sector in Piraeus bank, expects the fixity of the interest rate at the same level in today’s meeting because the inflation rate does not reached the corridor rate of 9.75%, despite the increase of the inflation as it surged to 8%.

CBE may head towards raising the interest rate within its coming meetings to face the inflation, in the light of expecting more political and security turmoil resulting in the halt of tourism and investment activities, shortage in the Egypt’s foreign exchange and the increase of US dollar rates.
Consequently, the occurrence of prices hikes because Egypt depends basically on import, he added.