Later today, Thursday, the Monetary Policy Committee of the Central Bank of Egypt will hold its last meeting before the end of 2022.
Analysts expect, according to recent polls, that policy makers will end the year 2022 with a significant increase of 200 basis points in interest rates to support the Egyptian pound against the dollar and other foreign currencies, and to curb rising inflation.
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A Archyde.com poll conducted on Tuesday predicted that the Central Bank of Egypt would raise the interest rate on overnight deposits by 200 basis points today, Thursday, as part of its attempts to curb rising inflation after the sharp decline in the value of the local currency.
The average forecast, in a poll of 12 analysts, indicated that the Central Bank of Egypt would raise interest rates on deposits to 15.25%, and lending interest to 16.25%, at the periodic meeting of the Monetary Policy Committee.
The central bank raised interest rates by 200 basis points at a meeting on October 27. On the same day, the local currency depreciated 14.5%, and the central bank announced that it had reached a staff-level agreement on a $3 billion financial support package with the International Monetary Fund.
Despite the devaluation of the local currency, the gap between its price against the dollar continued to widen in the official and parallel markets, as the price of the dollar reached about 24.70 pounds in banks and more than 36 pounds in the black market. The official rate of the Egyptian pound against the dollar was 19.7 before the devaluation in October.
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In a related context, Egyptian Prime Minister Mostafa Madbouly issued directives that the goods accumulated in ports should be released, during a meeting he held yesterday with the governor of the Central Bank, the ministers of finance and trade, and the head of the Customs Authority.
Madbouly called for intensifying work to reduce the release time for various shipments in the ports, especially those related to strategic commodities and foodstuffs, in order to achieve an increase in their supply, especially with the approaching month of Ramadan, and to secure stocks of those commodities, according to a statement issued by the Council of Ministers after the meeting.