After the jump in inflation. Is the average bank cutting rates again



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06:00 PM

Monday 11 March 2019

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Three of the six investment banks expected the central bank to cut flat rates at the next Finance Policy Committee meeting with between 0.5 and 1 per cent, despite the February high rate of inflation.

Although three other investment banks expected the average bank to negotiate flat rates following the inflation in February, along with a number of other factors.

The central bank's policy committee is expected to hold its second meeting in 2019 on Thursday (28 March).

The bank recorded interest levels 1 at the first meeting of the Finance Policy Committee this year on 14 February after it was established at the last six meetings between May and December 2018. t currently at 15.75 per cent for deposits and 16.75 per cent for loan. .

The Faros investment bank in a report yesterday said the central bank had to cut interest rates at 1% at the next policy committee meeting, which was agreed by Mona Bedair, a leading economic socio-economist at Prime Investment Bank.

Beltone's bank report said today that the middle bank will cut interest rates between 0.5% and 1%, despite the February high rate.

Annual inflation rates rose to 13.9% for the Republic, 14.4% for cities, 12.2% for cities and 12.7% for cities in January, according to the Sunday CAPMAS data.

This continues when inflation rises monthly to 1.8% for the total Republic in February, compared to 0.8% in January, which is affected by high vegetable and poultry prices.

“We see that high-inflation reading is not a threat to our prospect of inflation, and we maintain our vision of continuing inflation with the first half of 2019 onwards. , "said Beltone.

“We are repeating what we expect to be able to cut interest rates again in the first half of 2019, before we move the automatic pricing method for petroleum products,” he said.

It is expected that the government will put in place the automatic prices of petroleum products in the coming months as part of its commitment to the International Finance Fund under the IMF funded economic reform program. billion over the three years ending this year.

There are a number of reasons why the central bank should continue to reduce cash policy and cuts in interest rates, which resumed in February, despite the high level of polls last month, Mona said. T Four Lamasrawi.

She added that, among these reasons, the central bank is intended to help stimulate economic growth and maintain the right economy during the period, "even though there is a slight diploma on courses. T a target set by the Central Bank, which sets a long term future ”.

The central bank aims to reduce the annual rate of inflation to 9% (up or down 3%) overall, last quarter of 2020.

She said that there is no high level of inflation at high rates of inflation in February, but that it is linked to variable price fluctuations, and that the impact of the high interest rate is limited.

She confirmed that the opportunity remains appropriate to reduce interest rates as a result of reversal of investment over the past two months.

In its report, Faros pointed out that the government debt instruments continue to be attractive to foreign owners, who are the result of high demand for bills and financial bonds, which have continued to strengthen the pound against the dollar, an increase of 2.6% against dollars from the start of the year.

Closer investments in financial bills and bands in the Egyptian market at the end of February at the end of February to about $ 15.8 said, Finance Minister Mohamed Meit said in a statement on Wednesday. T

Faros believed that his interest was the result of the government's strategy to offset debt service expenditure as a percentage of total budget expenditure, and no reduction after the meeting to 26 September meeting.

Last week the Minister for Finance announced the launch of a new debt management plan aimed at reducing public debt to 80% of GDP by 2022, especially in the light of the country's success. reducing the comparator level from 108% in the fiscal year to 97% in the detection year.

The minister also said that this plan also aims to reduce the level of total budget deficit to around 7% of GDP in the financial year 2019-2020, compared to around 8.4% of the overall deficit. this year is looking forward.

Mona Bedair said that encouraging the real economy will help to meet the objectives of the public debt strategy by contributing to a reduction in economic growth and therefore reducing public debt as a percentage of GDP by t These findings are being expanded.

"The central bank's mission is to balance growth and inflation, as well as backing the government's economic reform program, which is a key component of debt relief, accounting for 10 per cent of GDP. T in the 2017-2018 inquiry year, "said Beltone. In its report.

Pressures on the waulking

Mohammed Abu Pasha, the senior economist at the Hermes bank, expected that the bank would set a set amount of interest at the committee's financial policies meeting in March, after inflation in February.

"There is no worry as it is based in some food products," said Abu Pasha Lamasrawi. "But I expect the bank to reduce before the rate re-charges."

The Arqam Capital investment bank expected the bank to stage interest rates at the next money policy committee meeting.

Akram Capital said in a report today that the February inflation report is reducing the opportunity to cut interest rates at the March meeting of the Commission.

Published a report yesterday, Shuaa's investment bank, said hyperinflation would be adding another stone to cut interest rates by the end of the month.

“We see high-end readings at this time adding to the reasons why it might be more difficult to cut cutting fees in the middle of February,” said Shua.

Other issues, according to the Shua report, include the expected use in the gasoline price of 95th April and the seasons of Ramadan and Eid Al Fitr followed, and the anticipated increase in donations. T petroleum in June.

Arqam Capital anticipates the next stage of cuts in the second half of 2019.

Read also:

"Vegetables are too hot" Why was inflation reduced in February?

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