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CBE may raise interest rates by 200 bps in two meetings: HC

CBE may raise interest rates by 200 bps in two meetings: HC

ArabFinance: The Central Bank of Egypt (CBE) is likely to raise interest rates by 200 basis points (bps) in its next two meetings in 2022, Financials analyst and economist at HC Heba Monir forecast, according to a report emailed on September 19th.

The high inflation reported in August will negatively impact the CBE’s inflation target of 7%, Monir said.

She noted that HC expected inflation to average 14.3% until the end of 2022, referring to the increase in prices of gas supplied to the nitrogen fertilizers industry.

“Regarding Egypt's external position, we believe that pressure is accumulating given our fiscal year (FY) 2021/2022 current account deficit estimate of 4.8% of GDP, up from 4.6% a year earlier… net international reserves settling at $33.1 billion in August representing 4.71 months of imports coverage,” Monir commented.

It is worth noting that Egypt's annual headline inflation recorded 15.3% in August 2022, compared to 6.4% in the same month of 2021.

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