HC expects CBE to keep interest rates on hold: Egypt

PHOTO

HC Securities and Investment expects the Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) to keep interest rates unchanged in its upcoming meeting, according to the research note emailed to Arab Finance on June 18th.

“We expect the MPC to leave the overnight deposit and lending rates unchanged, despite the latest 2.72% month-on-month (MoM) increase in May’s monthly inflation figure,” HC’s Financials Analyst and Economist Heba Monir commented.

The forecast is based on the government’s decision to not to increase the burden on the companies’ borrowing capabilities, keeping local debt servicing cost under control, drop in the country’s one-year credit default swap (CDS), and the government’s decision not to devaluate the Egyptian pound, she added.

It is worth mentioning that the CBE’s MPC kept the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 18.25%, 19.25%, and 18.75%, respectively, at its previous meeting in May.