Egypt’s central bank to keep interest rates unchanged during 2021: Capital Economics

  • Date: 20-Jun-2021
  • Source: Egypt Today
  • Sector:Economy
  • Country:Egypt
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Egypt’s central bank to keep interest rates unchanged during 2021: Capital Economics

CAIRO - 20 June 2021: Capital Economics expected Egypt's Central Bank to remain holding the interest rates unchanged in the near term, with anticipation that inflation will drop further below target in the fourth quarter which would re-open the door for easing late in the year. It also expected that policymakers will reduce the overnight deposit rate by a total of 150bps the end of next year, taking it 6.75 percent. This is more easing than the consensus currently anticipates. Capital Economics clarified that the policymakers will keep interest rates on hold for much of this year, adding that It noted in a report that real interest rates, at around 3 percent, are among the highest in the emerging world. Capital Economics also thought that inflation will slow in the fourth quarter and fall below the lower bound of the CBE's target range. "This should provide room for the CBE to lower interest rates,“ it referred. It referred to the CBE statement which stated that policymakers have become more positive about the economic recovery. Officials reported that Q1 GDP growth picked up from 2.0% y/y in the final quarter of last year to 2.9 percent y/y. However, while the CBE