(MENAFN- Daily News Egypt) The Monetary Policy Committee (MPC) at the Central Bank of Egypt (CBE) will hold, next Thursday, its fourth regular meeting of the current year, to agree on CBE's principal interest rates, and set the interest rates of banks working in the national market.
During the meetings held in February and April, the MPC at CBE decided to fix the bank's basic interest rates as follows: deposit rate at 8.75% and per-night loan rate at 9.75%. MPC maintained the rates of main operations, credit, and deposit at 9.25%, after being reduced by 0.5% in January.
Deputy Manager of the treasury sector at the Arab Investment Bank (AIB) Dalia Wahbah said that it is highly expected that the MPC will fix CBE's interest rates, as previously decided in February and April.
Increasing CBE's interest rates leads to the increase of interests on treasury bonds and bills issued by the state to cover the budget deficit. In this regard, Wahbah added that the CBE may not raise its principal interest rates until the end of this year, in order not to increase the burden of the national loan service.
According to Wahbah, official data indicates that inflation rates have decreased, allowing CBE to fix interest rates too.
Wahbah expects that by the beginning of next year CBE may decrease interest rates to boost investments, once the projects of the Egypt Economic Development Conference (EEDC) held last March, or projects related to the Suez Canal Axis Development are implemented.
During its previous meetings, the MPC expressed fear about the economic development rates in the next period.
The committee expects that investments directed to major national projects, such as the Suez Canal Axis Project, will increase economic development rates. However, the increasing risk of lower gross domestic product (GDP) rates may be due to the instability of the international economy and the challenges that face the Euro zone.
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