Thursday, January 16, 2020
Books – Mostafa Eid:
The Monetary Policy Committee of the Central Bank will hold its first meeting in 2020, in order to determine the fate of interest rates, amid the fluctuating expectations of investment banks and bankers between fixation and reduction.
Today’s meeting is being held with the new formation of the monetary policy committee, which was approved by the bank’s board of directors a few days ago during its first meeting after a Republican decision to form the same board of directors headed by Tariq Amer, the bank’s governor.
The central bank had cut interest rates by a total of 4.5% four times over the past year, and the total reduction during the last two years had reached 6.5%, bringing interest rates closer to its level before floating, reaching 12.25% for deposit, and 13.25% for lending.
Experts and Phnom investor expectations differed regarding the expected decision by the Central Bank, as Beltone, Pharos, and Shuaa central banks investment banks expected interest rates today, while Hermes and HC investment banks expect to reduce interest rates between 0.5 and 1%.
And 4 out of 5 bankers suggested that Masrawy’s poll reduce interest rates between 0.5 and 2% during today’s meeting.
This meeting comes after the annual inflation rate rose to the highest level in 5 months, recording 6.8% in December compared to 2.7% in November, according to the data of the Central Agency for Public Mobilization and Statistics.
And the annual rate of inflation in cities reached 7.1% in December, compared to 3.6% last November.
While the monthly inflation rate for the total of the republic recorded a negative rate of 0.2% compared to a negative rate of 0.5%, according to the agency.
The central bank aims to reach an annual inflation rate of 9% (with an increase or decrease of 3%) on average, during the last quarter of 2020.