Tuesday, June 6, 2023
HomeEconomyPOLL-Egypt's central bank to raise rates by 100 bps: Reuters poll

POLL-Egypt's central bank to raise rates by 100 bps: Reuters poll

CAIRO (Reuters) – Egypt’s central bank will raise the overnight deposit rate by 100 basis points (bps) on Thursday in an attempt to curb a pick-up in inflation, a Reuters poll forecasts.

The median forecast of a survey of 15 analysts is for banks to raise deposit rates to 100 .100% and its lending rate is 13.16% in its regular monetary policy at the committee meeting.

The committee will meet a day after the Fed meeting, which is expected to raise U.S. interest rates.

Central Bank of Egypt maintains interest rates at last two meetings in June 23 and August 23 unchanged*), but raised it by 200 basis points in May, saying it was seeking to rein in inflation expectations after prices surged to their fastest pace in three years.

“A Continuation of EFG Hermes’ Mohamed Abu Basha said rising inflation and weakness in the Egyptian pound necessitates further monetary tightening.

Egypt’s annual urban consumer Inflation accelerated from August to 14.6% .6% year-on-year, while core inflation accelerated from 23 rose to 16.7% .6%.

The central bank’s inflation target range is 5-9%, but Said in June that it would tolerate higher levels until after the fourth quarter.

Not all analysts expected a rate hike.

Wael Ziada of Zilla Holding said that most of the economic shock to Egypt is external and is already reflected in domestic inflation. Any rate hike will have minimal impact on inflation.

“On oil prices and external variables of the food price index may suggest that the worst of import inflation is over,” he said.



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