The Clap
Fitch Ratings expects the CBE to raise interest rates by an additional 3% before the end of the year, potentially leading to an increase in the cost of lending, a reduction in consumption, and a decrease in inflation.
The Deets
The report also said that the aid package for EGP 130 billion, which the government allocated in March, will partially offset the effects of negative inflation.
Fitch’s research also shows that the tourism sector will improve and that the government is planning to develop the industrial sector and is directing support to some exports.
Why this Matters
The interest rate is currently 11.25% for deposits and 12.25% for lending, after the CBE fixed rates at its last meeting.
Fitch expects a 3% increase in interest rates before 2023 🤔
