Analysts unanimously see CBE keeping interest rates on hold

The Central Bank of Egypt (CBE) is expected to hold interest rates steady for the third consecutive time when its Monetary Policy Committee (MPC) meets this Thursday

The math behind the hold: in May

REMEMBER- its meeting in May

“Despite our estimates of relatively contained monthly pressures in June and July, we believe annual headline inflation could accelerate to 16-17% in the coming two months

Thndr economist Esraa Ahmed agrees that the upside risk is active

Economic analyst Ehab Saied echoes the sentiment.

The deflationary turn

Post-war dynamics are structurally flipping previous supply-side shocks on their head.

Consumers are also postponing purchases in anticipation of further price cuts, sparking a dual stagnation in demand and supply.

AASTMT Shaimaa Wagieh favors the same cautious route, giving a 70% probability to a hold against a 30% chance of a limited 50-bps cut. “The closest scenario is to fix interest rates during the next meeting, as part of a policy of anticipation and assessing the impact of previous cuts on inflation rates and economic activity,” she says, aligning with the precautionary approach dominating global central banks right now.

The currency cushion

The recent EGP appreciation — dipping below the EGP 50 mark against the USD — has eased immediate macro pressures reserve cushion robust remittances

EFG Hermes’ Head of Macroeconomic Analysis Mohamed Abu Basha also sees little reason for an immediate policy shift

The indirect squeeze

Analysts agree that the CBE’s current policy remains highly restrictive, leaving no room or necessity for premature rate cuts.

The international monetary backdrop remains hawkish under Kevin Warsh.

Economic analyst Ahmed Shawky likewise expects global rates to remain elevated as the Fed under Warsh’s leadership prioritizes inflation control

Initially favoring a possible marginal cut, former Banque Misr Deputy Chair Sahar El Damaty ultimately altered her view: