HC Securities expects CBE to maintain interest rates
Updated 7/6/2025 2:25:00 PM
Arab Finance: HC Securities and Investment expects the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) to keep interest rates unchanged at its meeting on July 10th, 2025, according to a press release.
HC Securities attributed its projections to Egypt’s macroeconomic developments and the geopolitical conditions.
Financial analyst and economist at HC, Heba Monir, commented: “Egypt's external position showed resilience during the turbulent regional geopolitical tensions in June.”
She reflected on the FX flexibility, with the exchange rate between the USD and EGP recording EGP 49.6 by the end of June, almost unchanged compared to the previous month.
Monir also mentioned that Egypt’s one-year CDS declined to 301 bps from 333 bps at the beginning of the year.
In June, foreign investors were net buyers in the secondary market of Egyptian treasuries by EGP 1.2 billion due to the attractive treasury yields.
However, some foreign outflows caused interbank volume to surge to $800 million in mid-June due to the Israel-Iran conflict. This amount was higher than the daily average of between $150 million and $250 million.
Egypt’s worker remittances also surged by 77.1% year on year (YoY) during the first 10 months of fiscal year (FY) 2024/2025 to $29.4 billion, reflecting confidence in the FX liquidity in Egypt.
Regarding the non-oil business, the PMI index increased to 49.5 in May from 48.5 in April, driven by the renewed growth in the manufacturing sector.
“However, we expect some inflationary pressures in July as the Egyptian Parliament approved this week some amendments to the value-added tax (VAT) Law for some businesses, including cigarettes and tobacco,” she noted.
At its May 22nd meeting, the MPC cut the benchmark overnight deposit and lending rates by 100 bps to 24% and 25%, respectively, for the second time, after it had cut policy rates by 225 bps on April 17th.
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