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Thursday, 6 July 2017

What we’re tracking on 7 July 2017

It’s MPC day: Expect the central bank’s monetary policy committee to keep interest rates on hold when it meets later today. Nine out of 10 economists surveyed by Reuters expect the bank will hold the overnight deposit rate at 16.75% and the overnight lending and discount rate at 17.75%. Beltone Financial sees a resurgent EGP as keeping downward pressure on inflation, which should continue to rise.

New electricity prices coming today: Electricity Minister Mohamed Shaker is expected to announce new electricity prices in a press conference today, Al Mal reports. The new formula, which will be applied on July bills, is expected to raise prices by 20-40% across the different consumption brackets, which might be trimmed down to four from seven currently. Only customers in the highest consumption tier (consuming 1,000 KW or more) will be paying a higher price than the actual cost of production at EGP 0.97 per KW, Shaker had said last month, explaining that profit generated from the highest-volume customers will be used to partially to cover the subsidy for the lowest consumption bracket. The hike is expected to reduce the state’s electricity subsidy bill in FY2017-18 to c. EGP 50 bn from EGP 82 bn, sources close to the matter tell AMAY.

The House of Representatives is off for its summer recess, which started today. It is left to President Abdel Fattah El Sisi to determine when the next session will commence. We imagine heated debates which could have turned into fist fights in MPs respective households on where to vacation.

The Qatar Smackdown looks set to be renewed for a new season, as the foreign ministers of Egypt, Saudi Arabia, Bahrain and the UAE denounced the regional pariah’s response in a press conference yesterday (watch, runtime 33:07). Qatar “responded in the negative” to its Arab neighbors’ demands, said Foreign Minister Sameh Shoukry without actually stating what its response was to the 13 demands. The quartet will continue their economic and political blockade on Qatar until Doha acquiesces to its neighbors’ demands, Saudi Foreign Minister Adel Al Jubeir said at the press conference. Al Jubeir also said the four countries have the sovereign right to take further actions whenever they see fit, but the ministers stopped short of announcing any such measures yesterday. The Saudi FM also noted that Turkey said it would adopt a neutral position in the rift. Bahraini FM Khalid bin Ahmed Al Khalifa said the Gulf Cooperation Council has yet to discuss suspending Qatar’s membership in the council.

President Abdel Fattah El Sisi and US President Donald Trump also discussed the situation with Qatar during a phone call yesterday, according to a White House statement.

Despite the external pressure, Doha will likely stick to its economic guns. Especially considering that ExxonMobil, Royal Dutch Shell, and France’s Total are all courting the small Gulf state to get a piece of its recently announced LNG production expansion, Reuters reports. “The companies already have large investments in countries on both sides of the dispute, and are keen to remain neutral” in the spat between Qatar and its Arab neighbors, the newswire says.

You can now fly to the US with your laptop on board from Dubai, as Emirates Airways was given the clear by the US Department of Homeland Security, Bloomberg reports. Emirates’ reprieve leaves Qatar Airways behind as the only major airline the ban still applies to, on top of being subjected to airspace bans from its neighboring countries. No word yet on flights from Egypt.

If what we’re hearing is correct, your weekend commutes could get a whole lot worse: Ahram Gate is stating that the Sixth of October bridge will be partially closed every weekend for a month for development work. Work will take place in the direction from Nasr City to Ramsis Square from Thursdays at midnight, till Sundays at 6 am. This runs from today till Friday, 4 August. One lane will be open for traffic.

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