Egyptian economists and investment banks predicted that interest rates would remain fixed at 15.75 percent for deposit and 16.75 percent for borrowing. This prediction came during the meeting of the Central Bank of Egypt’s (CBE) Monetary Policy Committee on Thursday after fuel prices increased by 16 to 30 percent. Updated electricity prices will be implemented in August.
Former vice president of BLOM-Egypt Bank Tarek Metwali expects that the increasing prices of fuel and electricity will increase inflation rates by 1 to 2 percent. He discounted the suggestion that prices would decrease due to the declining (by 14 percent) exchange prices of the US Dollar against the Egyptian pound.
Banker Tarek Helmi expects that interest rates will remain fixed from the last week of August until December and that the impact of increasing fuel prices on inflation will be limited due to the declining exchange prices of the US dollar against the Egyptian pound.
Helmi predicted that inflation would increase by 1.5 to 2.5 percent due to increasing prices of fuel and electricity.
Senior researcher of Pharos Bank Radwa al-Swaifi said that the CBE will fix interest rates at Thursday’s meeting as the monthly inflation rates will rise between July and September.
Swaifi clarified that the decision to increase fuel prices should have been implemented in June, but the government postponed the change.
Edited translation from Al-Masry Al-Youm
