Cairo – Mubasher: The Central Bank of Egypt's (CBE) Monetary Policy Committee (MPC) is expected to slash interest rates by 1% in its next meeting on 22 August, head of research sector at Pharos Holding for Financial Investments, Radwa El-Swaify, said.

Falling inflation has bolstered expectations of an interest rate cut, El-Swaify noted, adding that the North African nation’s annual inflation rate fell to below 9%, reaching the CBE’s 2020 inflation target earlier than expected.

Egypt’s annual inflation rate declined to 7.8% in July 2019 from 13% in July 2018, the Central Agency for Public Mobilization and Statistics (CAPMAS) previously revealed.

As real interest rate is higher than 5% and the average real interest rate is 2%, the CBE’s MPC will likely cut interest rates by 2-3% by the end of 2019.

Since the flotation of the Egyptian pound in November 2016, the CBE has raised interest rates three times. Interest rates were increased by 3% following the flotation, 2% in May 2018, and 2% in July.

In February 2019, the CBE cut interest rate by 1%.