08:28 PM
Monday, March 11, 2024
Written by Manal Al-Masry:
J. Morgan Bank expects the Central Bank of Egypt to raise the interest rate by 2% at its regular meeting during the month of March due to increasing indicators of inflation trend rising, and it may record an “unprecedented level” after the decline in the value of the pound against the dollar, according to what was reported by some Arab and international websites.
The date of the regular meeting of the Monetary Policy Committee at the Central Bank is next March 28, after the Central Bank raised the interest rate by 6% at once last Wednesday, bringing its interest rate (corridor) to 27.25% for deposits and 28.25% for lending.
The Central Bank raised the interest rate after it announced last Wednesday the liberalization of the exchange rate against the pound with the aim of eliminating the black market, causing the dollar to rise to about 50 pounds per dollar before gradually declining again, reaching by the end of today’s trading about 49.1 pounds in some banks.
By raising the interest rate, the Central Bank aims to contain inflationary pressures resulting from the decline in the exchange rate of the pound against the dollar.
In a research note, analysts at JP Morgan suggested that the interest rate on deposits would be increased again by 2% at the next meeting of the central bank, which may be held later this month.
The annual rate of inflation at the city level rose again for the first time in four months last February, recording 35.7%, up from 29.8% last January, according to a statement by the Central Agency for Public Mobilization and Statistics.
Hassan Abdullah, Governor of the Central Bank, said in a press conference on Wednesday that he aims to contain inflationary pressures, as inflation is the fiercest disease affecting the economy and has reached single digits – under 10%.
The Central Bank targets an average inflation rate between 5% and 9% during the last quarter of this year.
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