Bilal Khan, senior social scientist at normal chartered , notes that the financial organization of Egypt (CBE) down its policy rate (the long deposit rate) by 150bps to fourteen.25% on twenty two August, in line with normal Chartered’s expectations.
Key Quotes
“The Bloomberg accord forecast was for a 100bps cut. we predict the (dis)inflation outlook supports additional easing; international market sentiment is that the key supply of uncertainty on Egypt’s financial policy path.”
“The CBE aforementioned future selections are going to be target-hunting by “inflation expectations” instead of past CPI prints. we tend to forecast that inflation can stay well anchored within the coming back months, well among the CBE’s target of Sep 11 3ppt for end-2020. we tend to maintain our incorporate another 400bps of cuts for the remainder of FY20 (year ending June 2020).”
“The main risk to our decision is international financial-market sentiment towards EM and therefore the impact of additional CBE easing on offshore holdings of Egyptian debt.”
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