CBE likely to cut interest rates in April as inflation drops: NBK
Updated 3/25/2025 1:25:00 PM
Arab Finance: The Central Bank of Egypt (CBE) is expected to start cutting interest rates during its next meeting in April, due to the 12.8% drop in inflation registered in February, according to the NBK quarterly brief for Egypt.
The report anticipates the CBE to lower rates by 2-3% initially and by another 3-5% later in the year.
In spite of external risks like a widening current account deficit, the gross domestic product (GDP) growth is projected to increase to 4% in fiscal year (FY) 2024/25, backed by stronger private consumption.
In the first quarter (Q1) of FY24/25, the current account deficit widened to $6 billion due to higher imports and low Suez Canal revenues.
Hence, the International Monetary Fund (IMF) stressed the need for greater exchange rate flexibility.
Eurobond issuances and EU funding boosted foreign reserves to $47.4 billion in February, with Egypt’s recent $2 billion Eurobond sale oversubscribed five times.
The IMF recently concluded the fourth review of Egypt’s economic reform program under the $8 billion Extended Fund Facility (EFF), enabling the country to access approximately $1.2 billion
The fund called for additional structural reforms, particularly in privatization, governance, and transparency.
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