CAIRO: Despite pressure from investors, Egypt’s central bank is hesitant to raise interest rates, reported Bloomberg.
Although the Egyptian pound was devalued five months ago, investors still believe that the currency needs another devaluation to reflect its true value.
Speculations about the weakening of the pound had already been circulating when Egypt requested another loan from the International Monetary Fund in March.
“The recent communication from the IMF hinted at a clear unhappiness with the lack of FX flexibility ahead of any potential new loan program,” stated Paul Greer, a London-based money manager at Fidelity International.
“To that end, we are expecting the Egyptians to continue to weaken their currency,” he added.
The central bank’s next monetary policy meeting is scheduled for Aug. 18, and after its decision to keep rates unchanged in June, investors have no idea what to expect.
Egypt’s beverage industry surged by 30.2 percent month-on-month in May with the beginning of the summer season, according to data from the Central Agency for Public Mobilization and Statistics.
Moreover, the manufacturing and extractive industries saw a 3.91 percent month-on-month rise in May.
Also, the food industry witnessed a similar monthly increase of 3.26 percent that month.
Suez Canal Bank
The growth of the retail banking sector in Egypt had positive effects on profits, bank deposit growth, and lending portfolios in the Suez Canal Bank, according to Hussein Al-Refai, Chairman and Managing Director of the Egyptian Suez Canal Bank.
Its profits grew by 11.2 percent reaching 268 million Egyptian pounds in the first half of 2022, and it induced 1.7 billion Egyptian pounds in investments and assets volume, he added in an interview with CNBC Arabia.