Egypt’s central bank seen cutting interest rates next meeting: IIF

Egypt’s central bank is likely to cut its key interest rates in its upcoming monetary policy meeting, an Institute of International Finance (IIF) report showed.

The report released recently by the IIF, a global bank lobbying group, said the Egyptian central bank could cut rates given a drop in headline and consumer inflation rates.

Headline inflation decelerated to a four-year low of 8.7 percent in July from 13 percent last year, surprising analysts who had expected inflationary pressures to rise in the wake of a round of subsidy cuts that pushed fuel prices 16-30 percent higher.

Egypt’s economy is now flexible and in strong position following a three-year IMF-backed economic reform programme, the IIF report added.

The economy is expected to stablise at 5 percent in the near term, it said.

However, IIF referred to some structural challenges Egypt has to overcome to maintain its strong economic growth.