HC expects CBE to keep interest rates unchanged in upcoming meeting

HC expects CBE to keep interest rates unchanged in upcoming meeting

Chief economist and banking analyst at HC, Monette Doss said, "Despite this, we expect the CBE to keep interest rates unchanged during its upcoming meeting before resuming monetary easing in its April meeting.. Our expectation is based on (1) the drop in Egypt's foreign currency deposits not included in net international reserves (NIR) to $4.41bn in January from $7.57bn in December going below its 2-year low of $5.20bn in January 2019. Comments Off on HC expects CBE to keep interest rates unchanged in upcoming meeting. We estimate Egypt's 12-month real interest rate at a positive 3.59% (using the latest 12-month T-bill rate of 14.11%, our average 2020 inflation forecast of 7.7% and a 15% tax on Egyptian treasury holdings by US and European investors) compared to Turkey's negative real interest rate of 0.92% (using the latest 14-month T-bill rate of 10.28%, Bloomberg 2020 inflation consensus estimate of 11.2% and factoring in that Turkish treasury holdings are tax-free), which suggests a positive interest rate differential of 4.51% in favour of Egypt.. On 16 January, the CBE's Monetary Policy Committee (MPC) decided to keep interest rates unchanged after undertaking rate cuts of 150 bps,100 bps, and 100 bps in August, September