Back to the complete issue
Monday, 29 January 2018

Economist expect interest rates to drop by 500 bps in 2018

Economist expect interest rates to drop by 500 bps in 2018: Economist interviewed by Al Mal see the central bank adopting a very cautious and tight monetary policy this year, with most seeing interest rates falling by up to 500 bps in 2018. The consensus appears to be that while inflation has been declining, the CBE would need to weigh that against a possible spike in inflation once the government further cuts subsidies in FY2018-19, which begins in July. Pharos Holding’s Head of Research Radwa El Swaify expects interest rate cuts to come gradually, seeing them to drop 200-500 bps this year. She sees the bulk of the interest rate cuts to come in mid-2018, once the CBE gets a better picture on inflation levels following the subsidy cuts. She added that adopting wide interest rate cuts early on in the year could send the wrong signal to the market that the CBE is turning completely towards growth. CI Capital’s Hany Farahat expects the first of the interest rate cuts to come during 1Q2018, and will drop 5% for the whole year.

When could it start? The CBE Monetary Policy Committee will hold its next meeting on 15 February.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.