Pharos Holding for Financial Investments has welcomed the Central Bank Egypt’s (CBE) decision to cut key interest rates by 1 percent (100bps).

“It was widely expected, due to the massive deceleration in inflation year to date (YTD). Since the real yield continues to be significantly high, we expect foreign investments in fixed income not to be affected by the decision, especially after the Fed monetary easing last week and in light of YTD strength in the EGP against the USD,” head of Pharos equity research Radwa El- Swaify told Abram Online.

The decision will support two macro objectives including higher private investments, which is a key to sustainable growth rates especially since ministry of finance is targeting 6.4 percent in FY 20/21, and lower debt service, which leads to a narrower fiscal deficit, which are two key targets for the government within the macro reform programme, according to El- Swaify.