The Central Bank of Egypt’s (CBE) Monetary Policy Committee is expected to leave overnight deposit and lending rates unchanged at 9.75% and 10.75% respectively, as well as repo rates at 10.25% and credit and discount rates at 10.25% in its meeting on Thursday.
Bankers ruled out that the committee will raise rates again after raising them last March so as to control the exchange rate and eliminate dollarization, affirming that leaving interest rates unchanged is essential in the current period so as to achieve the government’s plan in increasing investments and boosting growth rates.
Haitham Abdel Fattah, head of treasury department at the Industrial Development and Workers Bank of Egypt, expected the MPC to keep interest rates unchanged in its meeting today because it had raised them in its last meeting and there is no need for raising or lowering them in the meantime.
As the country seeks to encourage investments, it will not increase borrowing costs by raising interest rates, he added. In addition, the return on treasury bills did not increase after reaching 14%, he noted.
Sharaf Othman, head of treasury at Arab Banking Corporation, also ruled out that MPC will raise interest rates in its meeting today because it will not increase borrowing costs while there is a pressing need for increasing local and foreign investments in the current period.
CBE’s Monetary Policy Committee had raised benchmark overnight deposit and lending rates by 50 basis points to reach 9.75% and 10.75%, respectively and also raised the main operation by 50 basis points to reach 10.25% and discount rate by 75 basis points to reach 10.25% in its meeting on March 21st, 2013.
