HC Securities forecasts CBE to maintain interest rates
Updated 11/17/2024 2:16:00 PM
Arab Finance: HC Securities and Investment's Financial Research Department expects the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) to keep interest rates unchanged during its meeting on November 21st, 2024, as per an emailed press release.
Macroeconomic Analyst at HC Heba Mounir highlighted several key factors behind this forecast, pointing to a stabilizing external economic position for Egypt.
These include a $205 million increase in the country's net foreign exchange reserves to $46.94 billion in October and a 6% monthly rise in the net foreign currency assets position of Egypt's banking sector.
Despite these challenges, HC analysts view Egypt’s attractive real interest rates estimated at 2.9% on the average yield for 12-month treasury bills, and a lack of significant depreciation in the Egyptian pound until at least 2025 as key factors that should allow the CBE to hold rates steady.
HC also noted Egypt's significant upcoming external debt repayments, which include a $4 billion obligation in November and a $1 billion repayment to foreign oil companies, making rate stability a more probable decision.
The CBE last raised interest rates in March 2024 by 600 basis points, bringing the total hike since 2022 to 1,900 basis points.
Global developments also factor into the outlook, with the US Federal Reserve and European Central Bank both reducing interest rates recently, reflecting a more cautious stance on global monetary tightening.
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