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Experts expect the Central Bank's monetary policy committee to set the deposit and lending rate at its scheduled Thursday meeting, stressing that the "central" does not want to increase key inflation and ensure the withdrawal of foreign direct investments.
The central bank's monetary policy committee announced a cut in interest rates earlier this year, in two successive meetings in February and March, before deciding to fix it for seven months. Overnights and overnight lending rates remained unchanged at 16.75% and 17%. 75% respectively.
Fakhri al-Faqi, the economic expert, stressed that it is highly probable that the borrowing and deposit rates will be determined during the meeting for a number of reasons, mainly due to the continuing high inflation of 17.5% and the increase in the interest rate Current investors, with a global wave of oil inflation, as well as stabilization will ensure that foreign direct investment will not emerge from Egypt due to the high interest rate in emerging markets, which reached 30 markets, mainly Turkey and A Argentina, which reached the interest rate at 60%.
Al-Fiki pointed out that Egypt had foreign direct investment of $ 23 billion, "hot money", "secretly" not part of foreign reserves from the "exchange rate liberalization" decision on 3 November 2016, and 95% The public fund, 1.5% on the stock market and the remainder in various sectors. Since April, $ 10 billion of these funds have been withdrawn due to higher interest rates in emerging markets.
He noted that the central bank seeks to retain the remaining 23 billion foreign direct capital through interest rate stabilization, which foreign investors see as a good indicator, with a good investment climate, there are no risks like many emerging market countries, he added. the central bank will try to lower the interest rate in early 2019. It is expected that tourist revenues will increase with the appearance of Christmas celebrations and the stability of the global economic system ing, especially in emerging markets.
Hamdi Azzam, vice-president of the Bank for Industrial Development and Credit Bank, agreed with al-Fiki that interest rate stabilization would be the closest, underlining that there are currently no reasons to raise or lower the interest rate and that stabilization is the closest due data both internally and externally.
He added that the employees of the Central Bank of the Monetary Policy Committee have the information and the facts we do not have, and the fact that the risk rates in raising or stabilizing or reducing the interest rate and hence is based on the best decision and based on the public interest of the country.
Tariq Hilmi, a member of the board of Suez Canal Bank, agreed that the nearest interest rate is fixed. Central Bank policy has succeeded in lowering the key inflation rate to 14% after reaching more than 30%. The interest rate cut policy since the beginning of this year has remained stable for several months due to the emergence of the emerging markets crisis that has managed to address them and to avoid their negative effects.
He added that the vision of the President of the Republic and the State aims to reduce the central government budget deficit and public debt deficit, so he will not take the decision to increase interest in not increasing the budget deficit. Reducing the interest rate will lead to the diversion of the sector from investment in deposits and certificates, so it is unlikely choice.
He predicted that the central bank would start lowering the interest rate in the second quarter of the current year, depending on the improvement in the level of inflation, and according to the Monetary Policy Committee's opinion on things at that time if changes or impacts occur at local and global level.