Back to the complete issue
Tuesday, 1 October 2019

CBE easing cuts gov’t interest bill by a fifth -Kouchouk

CBE easing cuts gov’t interest bill by a fifth -Kouchouk: The Central Bank of Egypt’s (CBE) interest rate cuts in August and September will slash the government’s interest bill by a fifth, Vice Finance Minister Ahmed Kouchouk said yesterday, Reuters reported citing MENA. The government’s interest bill will fall by as much as 20% to EGP 20 bn from the EGP 25 bn it was paying before the latest round of monetary easing, he said.

Every percentage point cut in interest saves the state budget between EGP 8 bn and EGP 10 bn a year,” Kouchouk was quoted as saying on the sidelines of “an investment conference” in Dubai (presumably the Beltone Access conference, but not specified in the original story). The CBE has cut key interest rates twice over the past two months, making a 150 bps cut in August and a 100 bps cut last Thursday. The overnight lending rate now stands at 14.25% and the deposit rate 13.25%.

Despite the cut, investors in a low-yield world are still hungry for Egyptian debt: Foreign holdings of Egyptian treasuries climbed to USD 18.3 bn in August, up from USD 16.7 bn in July, Kouchouk said. EGP treasuries will continue to be attractive for foreign investors because of the economic stability brought about by the government’s reform program, he added. Meanwhile, foreign holdings in treasury bills fell to USD 15.2 bn at the end of August from USD 16.9 bn at the end of the previous month, according to CBE data (pdf).

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. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank 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; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.