CI Capital: Egypt set to cut rates soon

Big 5

Egypt’s central bank is widely expected to bring interest rates down in the coming period, according to investment bank CI Capital’s chief executive Hazem Badran.

Lower interest rates should help Egypt attract more foreign investments whether from businesspersons or institutions, Badran told Amwal Al Ghad on Monday on the sidelines of the a Euromoney conference in Cairo.

The central bank has raised key interest rates by a total of 700 basis points, or 7 percentage points, since it floated the Egyptian pound in November as part of a $12 billion International Monetary Fund loan programme aimed at boosting the economy.

The Monetary Policy Committee said in July that it sees a “measured easing of the monetary policy stance to allow for a reduction in interest rates” as soon as “underlying inflation” starts to moderate. Inflation had surged to more than 30 percent, the highest level in decades.

In August, the pace of price increases slowed to 1.1 percent from 3.2 percent in July. Monthly core inflation, which excludes volatile items and regulated products, eased to 0.3 percent, the lowest level in a year.