CBE likely to raise interest rates by 200 bps: HC Securities

CBE likely to raise interest rates by 200 bps: HC Securities

The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) is expected to raise interest rates by 200 basis points (bps) during its last meeting in 2022, according to a report by the Research Department of HC Securities and Investment emailed on December 18th.

The potential increase in interest rates would aim to curb inflation and make carry trade attractive, Financial Analyst and Economist at HC, Heba Monir, said.

HC’s report expects Egypt’s annual inflation to reach 19.1% in December.

The report cites official estimates of the external debt-to-GDP ratio setting it at 38.8% for the fiscal year (FY) 2022/2023, up from 37.7% in FY 2021/2022.

Earlier in December, the Central Agency for Public Mobilization and Statistics (CAPMAS) announced that Egypt's annual headline inflation rate had risen to 19.2% in November 2022, compared to 6.2% in the same month of 2021.

It is worth noting that Egypt’s net international reserves (NIR) stood at $33.523 billion at the end of November, growing by $121 million from $33.411 billion at the end of October.

In a special meeting on October 27th, the CBE decided to raise interest rates by 200 bps.

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