HSBC report expects significant rise in interest rate in Egypt


HSBC report expects significant rise in interest rate in Egypt

A report issued by HSBC expected the Central Bank of Egypt to raise the interest rate by 3 percent at the Monetary Policy Committee meeting on Thursday, March 30, 2023.

The Monetary Policy Committee keeping the interest rate unchanged at its first meeting in 2023, in February, represented one of three main dimensions in increasing pressure on the exchange rate of the pound against the US dollar, the report stated.

The central bank kept interest rate at its last meeting unchanged, after raising it 8 percent, over four times in 2022. The overnight deposit rate, overnight lending rate, and the rate of the main operation were kept unchanged at 16.25 percent, 17.25 percent, and 16.75 percent, respectively.

HSBC bank added that the consequences of the central bank’s interest hike on increasing the burden of borrowing and slowing the growth rate will vanish.

The bank said the CBE must follow though an inflation-targeted monetary policy and to have a real return on investment in the Egyptian pound.

The bank stated that the real return – investment in the pound – is still negative at 15 percent against inflation, and therefore the central bank needs to follow a very strict monetary policy.

The annual core inflation rate jumped

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