Central Bank of Egypt likely to keep rates unchanged: Beltone

Ahram Online, Thursday 28 Apr 2011

Interest rates are expected to remain steady amid continued turmoil following the 25 January Revolution in Egypt

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) is expected to leave overnight lending and deposit rates unchanged, Egypt's leading investment bank Beltone Financial said in a press release today.

"In the CBE’s second MPC meeting post-revolution, we expect policy rates to be kept unchanged at the current levels, of 9.75 per cent and 8.25 per cent, for the overnight lending and deposit rates respectively. In addition, for the discount rate to remain on hold, at 8.5 per cent," the report reads.

Beltone also expects the CBE to continue its repo facility, introduced during its last MPC meeting on 10 March and activated on 22 March as a means to ease rising liquidity pressures on some banks, mainly on the back of the exit of foreigners from the fixed income market.

A poll by Reuters conducted yesterday showed eight out of nine economists forecast the CBE's MPC would leave its overnight lending and deposit rates unchanged to combat inflation and support economic growth. One economist sees a 50 basis point cut.

The MPC will meet today to decide on overnight lending and deposit facility interest rates.

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