The Clap
JP Morgan’s report expects the CBE to raise interest rates by 1.25% in its meeting on May 19th.
The deets
JP Morgan attributed its forecast to the jump in the inflation rate witnessed in
April 2022, as it rose to 13.1% YoY, compared to 10.5% YoY in March. This was due to the rise in food prices during Ramadan.
The report expects the average headline inflation to be 8.9% during the fiscal year 2022, and to rise to 13.9% during the fiscal year 2023, peaking at 17% by August 2023.
As a result, the report expects the CBE to continue raising the deposit rate throughout 2022, reaching 12.75% by year’s end.
Backstory
Last March, the CBE raised the interest rate by 1% in an extraordinary meeting to reach 9.25% for deposits.
For the full JP Morgan report, click here.
