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Experts expect the Central Bank's monetary policy committee to set interest rates on deposits and loans during the meeting scheduled for Thursday, stressing that «center» wants not to increase basic inflation, and to ensure non-departure of foreign direct investment.
The central bank's monetary policy committee announced interest rate cuts at the beginning of the year, more than two consecutive meetings in February and March, before deciding to fix them for seven months. Overnight transactions and lending rates remained unchanged at 16.75 percent and 17 percent . 75% each.
Dr. Fakhri al-Faqi, an economist, stressed that it is very possible that the interest rates on loans and deposits will remain during the meeting for several reasons, the most important being the continuation of the high inflation rate of 17.5%, and raising interest rates in the current economy. this will increase inflation by increasing production costs. Investors, with the global wave of inflation in oil, and stabilization will ensure that foreign direct investment does not come out of Egypt, due to high interest rates in emerging markets, which reach 30 markets, especially Turkey and Argentina, which reach interest rates of up to 60% . .
Al-Fiki points out that Egypt has $ 23 billion in "hidden", "hidden" foreign investment that has not been part of foreign reserves since the "exchange rate liberalization decision" on November 3, 2016, and 95% of this funds was used for buy bonds and bonds. Government wealth, 1.5% on the stock exchange and the rest in several fields Since April, $ 10 billion of this fund has been withdrawn due to higher interest rates in emerging markets.
He noted that the central bank is trying to keep the remaining 23 billion foreign direct funds, through interest rate stabilization, which foreign investors see a good ratio, with a good investment climate, there is no risk like many developing countries, he added that in the coming period The central bank will work to reduce interest rates as early as 2019. It is hoped that tourism revenues will increase with the emergence of Christmas celebrations and the stability of the global economic situation, especially in emerging markets.
Hamdi Azzam, vice president of Industrial Development and Credit Banks, agreed with al-Fiki that the stabilization of the interest rate would be the closest, stressing that at present, there is no reason to raise or lower interest rates, and that fixation is the closest because data, both internally and internally. External.
He added that officials from the Central Bank of the Monetary Policy Committee had information and facts that we did not have, and the fact that the level of risk when raising or stabilizing or lowering interest rates was therefore based on the best decisions and based on the country's public interests.
Tariq Hilmi, a member of the Board of Directors of the Suez Canal Bank, agreed that the closest interest rate was fixed. The Central Bank's policy succeeded in reducing the basic inflation rate to 14% after reaching more than 30%. The policy of lowering interest rates since the beginning of this year, and remained stable for several months due to the emergence of the crisis of emerging markets, which managed to overcome them, and avoid the negative effects.
He added that the vision of the President of the Republic and the State was aimed at reducing the state budget deficit and government debt, which was the work of the Central Bank, so that it would not make a decision to raise interest so as not to increase the budget deficit, adding that the banking sector mainly depends on the family sector in deposits and certificate, Decrease in interest rates will cause the transfer of sectors from investment in deposits and certificates, so this is an impossible choice.
He predicted that the central bank would start cutting interest rates during the second quarter of the current fiscal year, in line with the increase in inflation rates and in the view of the Monetary Policy Committee at the time, if there were changes or effects emerging at the local and global level.