Hisham Ezz Al-Arab, CEO of the Commercial International Bank (CIB) Egypt, anticipates a decline in Egypt's inflation rate by the second quarter of next year. This could provide the Central Bank of Egypt (CBE) with an opportunity to reduce interest rates by approximately 7% in 2025, bringing them down to 20% from the current level of 27.25%.
On November 21, the CBE’s Monetary Policy Committee (MPC) held its key interest rates steady for the fifth time in a row. The overnight deposit rate remains at 27.25%, the overnight lending rate at 28.25%, and the rate of the main operation at 27.75%. Additionally, the discount rate was kept unchanged at 27.75%.
According to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS), Egypt's annual urban consumer price inflation rate recorded 26.5 percent in October 2024 compared with 26.4 percent in September 2024.
Egypt’s monthly urban headline consumer price index inflation, recorded 1.1 percent in October 2024 compared with 1.0 percent in October 2023 and 2.1 percent in September 2024.
Speaking on a TV program, Ezz Al-Arab highlighted key concerns raised by the International Monetary Fund (IMF) regarding the role of the private sector in Egypt's economy.
He noted that the current distribution, with 70% dominated by the public sector and 30% by the private sector, is not ideal, particularly given the private sector's significant contribution to tax revenues.
Addressing currency dynamics, Ezz Al-Arab pointed out the global rise of the US dollar against various currencies, including the Egyptian pound, following the recent US elections.
"We must consider the dollar's movement globally. Since the last US elections, the dollar has appreciated against major currencies such as the yen, euro, and pound sterling, as well as in developing economies," he said.
He emphasized that Egypt is part of the global economy and reaffirmed the country’s commitment to a flexible exchange rate policy to avoid past challenges.
"The current policy adopted by the Central Bank focuses on maintaining flexibility, ensuring that the local currency reflects its true value," he added.
Ezz Al-Arab also commented on the recent fluctuations in Egypt’s foreign exchange market, stating that the movements of the US dollar against the pound mirror its global trends.
"The recent activity in Egypt’s market is natural and aligns with global patterns. Last Thursday (Nov. 21), the dollar reached EGP 49.91, followed by a wave of selling, with many customers converting currencies by the end of the day," he explained.
