CAIRO: Egypt’s central bank on Thursday cut its key interest rates for the second month in a row, after inflation fell further and as central banks globally ease monetary policy.
The overnight deposit and lending rates were cut by 100 basis points to 13.25% and 14.25% respectively.
All 11 economists surveyed by Reuters had said the Central Bank of Egypt’s (CBE) monetary policy committee would cut rates. Five said the bank would cut by 100 bps, three predicted a 150 bps cut and three 50 bps.
“It’s good for the economy, but broadly in line with expectations,” said Allen Sandeep, head of research at Egypt-based Naeem Brokerage, which predicted a 150 bps cut.
“We expect the monetary easing cycle to continue as inflation is likely to drop further before the MPC meets again in November,” Sandeep said.
The central bank cut rates after inflation figures fell to their lowest in more than six years, it said in a statement.
“Globally, the expansion of economic activity continued to weaken, financial conditions eased, and trade tensions continued to weigh on the outlook,” the bank said. “International oil prices remain subject to volatility due to potential supply-side factors that include geopolitical risks.”
July inflation came in significantly below expectations, and the headline figure fell further in August to a six-year low of 7.5%. Headline inflation reached a 2019 high of 14.4% in February.
At its last policy meeting in August, the central bank slashed its overnight deposit and lending rates by 150 basis points to 14.25% and 15.25% respectively.
The low July inflation figures took analysts by surprise as they had expected inflationary pressures to rise in the wake of a round of subsidy cuts that pushed fuel prices 16-30% higher.
The fuel price hikes were the last in a series of subsidy cuts tied to a three-year $12 billion loan from the IMF. Other reforms tied to the deal included devaluing the currency by about half and introducing a value-added tax.
The reforms have made Egypt an emerging market darling, and economists have hailed the measures. But millions of Egyptians are still struggling to make ends meet, despite the more positive economic data.
“It could have been more but I’m glad the MPC cut the rates. It is a good move,” said Angus Blair, chairman of business and economic forecasting think-tank Signet.
“It will not affect the economy too much as Egypt’s household and corporate sectors are not too leveraged,” he said. “It will, however, help to bring down the government’s debt burden and give it greater fiscal maneuverability.”
The bank’s decision to make a second consecutive cut came after Egypt’s main stock index suffered heavy losses between Sunday and Tuesday following rare weekend protests against alleged government corruption.
The benchmark EGX30 index rebounded, gaining 3.2% on Wednesday and 1.9% on Thursday.
Egypt’s central bank makes second consecutive cut to key rates
Egypt’s central bank makes second consecutive cut to key rates
- The overnight deposit and lending rates were cut by 100 basis points to 13.25% and 14.25% respectively
Saudi Arabia opens 3rd round of Exploration Empowerment Program
RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources, in collaboration with the Ministry of Investment, has opened applications for the third round of the Exploration Empowerment Program, part of ongoing efforts to accelerate mineral exploration in the Kingdom, reduce early-stage investment risks, and attract high-quality investment from local and international mining companies.
The third round of the Exploration Empowerment Program offers a comprehensive support package targeting exploration companies and mineral prospecting license holders.
The initiative aims to lower investment risks for projects and support a faster transition from prospecting to development.
"The program provides coverage of up to 70 percent of the total salaries of Saudi technical staff, such as geologists, during the first two years, increasing to 100 percent thereafter, in line with program requirements.
This support aims to develop talent, build national capabilities in mineral exploration, promote job localization, and facilitate the transfer of geological knowledge.
The application for the third round opened on Jan. 14, allowing participants to benefit from the Kingdom’s attractive investment environment, its stable legal framework, and streamlined regulatory structures, as well as integrated infrastructure that supports the transition from mineral resources to operational mines.
The ministry has set the timeline for the third round, with the application period running from Jan. 14 to March 31.
This will be followed by the evaluation, approval, and signing of agreements from April 1 to May 31, with the eligible projects set to be announced between June 1 and July 31 of the same year.
The program stages include submitting exploration data during the reimbursement and payment phase from Sept. 1 to Nov. 30, followed by technical and financial verification of work programs and approval of the disbursement of support funds in January 2027.
The exploration data will then be published on the National Geological Database in April 2027.
The ministry emphasized that the EEP focuses on supporting the exploration of strategically important minerals with national priority. It also contributes to enhancing geological knowledge by providing up-to-date data that meets international standards, helping investors make informed decisions and supporting the growth of national companies and local supply chains.
The ministry urged companies to apply early to benefit from the program’s third round, which coincided with the fifth edition of the International Mining Conference, which was held from Jan. 13 to 15.
