Arab Finance: HC Securities and Investment anticipates that the Central Bank of Egypt (CBE) will reduce interest rates by 150 basis points at its upcoming monetary policy (MPC) meeting on April 17th, 2025, as per an emailed press release.

The move is expected to support local economic growth amidst Egypt’s macroeconomic developments and ongoing geopolitical conditions.

Heba Monir, a financial analyst and economist at HC, outlined key economic trends contributing to this expectation. She noted that Egypt's external position showed mixed results, including a $1.48 billion month-on-month increase in the banking sector’s net foreign asset (NFA) position to $10.2 billion in February, a reversal from a net foreign liability position of $22 billion the previous year.

Domestically, Egypt's real GDP grew by 4.3% year on year (YoY) and 0.2% quarter on quarter (QoQ) in the second quarter (Q2) of fiscal year (FY) 2024/2025, driven by stronger exports.

Despite these challenges, Monir noted that inflationary pressures are on a downward trend due to base effects, which, along with improvements in the banking sector’s NFA position, should provide a favorable environment for rate cuts. Given the current global economic uncertainties, including fears of recession, HC expects the CBE to prioritize stimulating local growth by lowering interest rates.

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