Private sector, CBE take the debate on interest rate hikes to the pages of AMAY: The central bank’s most recent interest rate hikes were wrong and will prove detrimental to investment in the country, said Ahmed Elsewedy, president and CEO of Elsewedy Electric. The rate hikes encourage businesses to simply save out of fear of the risks associated with capital investments. An investor would need to see returns on a project reach 25% before considering investing, Elsewedy added in an interview with Al Masry Al Youm. He called on the government to adopt a monetary policy which would encourage spending and not saving. He also called for a CBE-backed initiative to promoting financing for the manufacturing sector to help mitigate the harmful impact of the interest rate hikes.

In a separate interview, CBE Deputy Governor Lobna Helal argued that inflation poses an even greater risk to the investment climate, which necessitated the interest rate hike. High inflation would hurt the competitiveness of products made in Egypt, she added, reminding readers that the most recent hike was only temporary. She also stressed that the CBE aims to address wider problems in the economy and cannot solely take into account concerns about the investment climate.