Egypt's central bank expected to cut rates by 175 bps: Reuters poll
Tweet
Share
E-mail
FILE PHOTO: General view of the new headquarters of the Central Bank of Egypt, at the New Administrative Capital (NAC) in the east of Cairo, Egypt, March 18, 2024. REUTERS/Mohamed Abd El Ghany/File Photo
CAIRO (Reuters) - Egypt's central bank is expected to lower overnight interest rates by a median of 175 basis points on Thursday, extending a reduction begun in April as inflation remains relatively low, a Reuters poll shows.
The median forecast of 16 analysts was for the central bank to cut the deposit rate to 23.25% and the lending rate to 24.25%.
The central bank last month lowered rates by 225 basis points (bps), its first adjustment since March 6, 2024, when it hiked rates by 600 bps and let the currency slide sharply against the dollar, measures taken as part of a $8 billion International Monetary Fund financial reform package.
"There are a lot of moving parts, but I don't see anything that suggests real rates need to stay so high," said Simon Williams of HSBC, who predicted a 200 bps reduction. "To not cut now would be a missed opportunity."
Egypt's central bank has been working to reduce inflation, which has trended downwards from a peak of 38% in September 2023. Annual headline inflation stood at 13.9% in April, just up from 13.6% recorded in March.
At its monetary policy committee meeting in April, the central bank said lower inflation had opened the way to further rate cuts in the future.
"Despite the pick up in inflation through March and April, Egypt's real interest rate is still firmly positive and leaves plenty of scope for policymakers to deliver a 200 bp reduction," said James Swanston of Capital Economics.
The central bank has been tightening money supply since signing its agreement last year with the IMF, officials and bankers say. M2 growth fell to an annual 25.8% to the end of March from a record 33.9% to the end of February.
(Reporting by Patrick Werr; Editing by Aidan Lewis)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- HSBC Upgrades Dollar General (DG) to Buy
- East German town bans future Holocaust memorial plaques
- ADARx Pharmaceuticals raises $446.3 million in upsized US IPO
Create E-mail Alert Related Categories
ReutersRelated Entities
HSBCSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
