Saudi News Saudi Arabia News – Riyadh: “Corona” forces Egypt to reduce interest rates to levels before “floating the pound” Source of the news – Saudi Arabia -cnn With details of the news, “Corona” forces Egypt to reduce interest rates to levels before “floating the pound”:
According to the decision, the overnight deposit and lending rate, and the main transaction price, are at 9.25%, 10.25% and 9.75%, respectively.
The Central Bank of Egypt attributed the reason for the decision to the global developments and conditions, and the subsequent move to preserve the gains achieved by the economy since the launch of the economic reform program, and what the bank used to take proactive steps in exceptional circumstances.
The bank said that the decision contributes to reducing rates of return as an exceptional measure, which contributes to supporting economic activity in all its sectors, taking into account future expectations of inflation and consistency with achieving the target inflation rate of 9% (± 3%) during the fourth quarter of 2020.
The Central Bank of Egypt confirmed that it would not hesitate to take the necessary steps regarding interest rates to maintain the achievement of price stability in the medium term.
On his part, Ashraf Al-Qadi, Chairman of the United Bank, said that the decision to cut interest rates by 3% comes within the framework of the measures taken to face the effects of the Corona virus, and what happened recently in the global markets to reduce the interest rate on the dollar and the collapse of many global exchanges, as is consistent With expectations of a rate cut from 1.5 to 2% this year, in addition to the recent interest rate cuts in other currencies.
In statements to CNN in Arabic, the judge outlined the positive effects of the decision on the Egyptian economy, saying that it will reflect on the movement of production and stimulate lending to small and medium-sized companies, but he alluded to its negative effects on owners of deposits and certificates of variable return, and the profitability of banks in exchange for the rotation of the economy and production movement.
Meanwhile, Radwa El-Swaify, head of research at Pharos Investment Bank, described the decision as “bold and unexpected”, considering that it supports growth rates and tackles the budget deficit and the industrial sector, as well as supporting the performance of the Egyptian Stock Exchange.
Al-Swaify added, in statements to CNN in Arabic, that the investment bank expected to reduce interest rates by 3% throughout the year during the months of April, June and August, but the central bank anticipated the matter and reduced it for once, to return again to the interest rate levels in the period before the exchange rate liberalization in November / November 2016, a return to the usual interest rates.
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