Cairo – Mubasher: The Central Bank of Egypt (CBE) is expected to halt the monetary easing cycle as long as growth and inflation rates continue to rise, according to Mubasher Trade Research.

Despite being low in the current period, inflation rates are projected to accelerate to reach the mid-point inflation target of 7% plus or minus 2 percentage points.

Additionally, the continuous increase in prices of basic commodities “could spill over to domestic inflation,” the research firm noted.

The CBE also “expressed its satisfaction with the recent economic growth rates, especially that growth in the first quarter (Q1) of fiscal year 2020/2021 was mainly driven by consumption”  

“This would imply that the detailed growth figures in Q2 of FY20/21 (which will be announced later on) and subsequent quarters would follow the same pattern.”

Last Thursday, the CBE’s Monetary Policy Committee (MPC) decided to leave interest rates unchanged for the second time in a row during 2021.

In November 2020, the MPC reduced the overnight deposit rate, the overnight lending rate, and the rate of the main operation by 0.5% to 8.25%, 9.25%, and 8.75%, respectively.