Beltone expects interest rates to drop 100 points during the next central bank meeting

Economy and stock exchange

Beltone predicted a 100 basis point cut in interest rates at the next monetary policy committee meeting on May 23, which was waiting for a softening of inflation readings in April.

In a research report, Beltone said a recent cut in interest rates ahead of February's expected time – aimed at boosting investor confidence by sending a strong confidence message in current monetary policy as well as confidence in the local currency path – would reduce the economic component of the process Decision-making, allowing for interest rate movements before the subsidy is removed, and favorable global conditions, such as the easing of deflationary monetary policies, will continue to support the resumption of the expansionary monetary policy by the Central Bank of Egypt.

The most likely scenario, however, is to cut interest rates by about 100 basis points by the end of the year, taking into account the expected inflationary implications with the introduction of the automatic pricing mechanism for fuel on a wider scale. On the other hand, Egypt still provides an attractive investment opportunity, Backed by Egypt's recent credit rating and the appreciation of the pound. The increase in foreign investments in treasury bills increased to $ 16.9 billion in April 2019 to bridge the gap caused by the exit of their investments in the second half of 2018 to return to their levels in July 2018.

The annual inflation rate in April fell by 13% from 14.2% in March 2019, supported by a 13% increase in food prices compared with a 15% increase in March, due to the slowdown in the prices of fruits, vegetables and poultry. On the other hand, The entertainment and culture sector saw a rise of 7% in April, up from 4.6% last month due to the spending of the Sham Al Naseem festivals. Monthly inflation rose by 0.5% against 0.8% in March.

.