The central bank meeting confused the market’s calculations, and prompted strong selling for fear that the central bank would take sudden decisions to raise interest rates, despite the tendency of analysts’ expectations to stabilize them.
Fears in the black market of raising interest:
Dollar prices on the black market achieved strong declines during the past few days’ dealings, with its fixation in banks, as it fell on the black market at levels of 35 pounds, compared to 40 pounds in the past.
A number of dealers in the black market today await the decisions of the Central Bank, as a number of experts tend to fix interest rates currently at levels of 18.25% on deposits and 19.25% on lending, while others tend to raise them by 100 basis points to attract foreign inflows, which raised They have correlations, prompting them to sell the dollar as the possibility of a rate hike still exists.
Nematallah Shukri, head of the research department at HC Securities and Bonds Brokerage Company, said that she expects the central bank to raise interest rates at its meeting tomorrow, contrary to the prevailing expectations of fixation.
Shoukry mentioned that her expectations of an increase are supported by the fact that the decline in inflation rates in April is considered a short-term decline, but it will quickly rise again in May by about 1% due to the recent increases in diesel prices and the rise in the prices of food commodities.
Abandoning the dollar on the black market after postponing the flotation:
The dollar’s price declines on the black market came at a time when expectations confirmed that the central bank would temporarily abandon the floating of the pound now, as the black market was betting on the central bank devaluing the pound, which prompted it to sell the dollar at prices higher than fair levels.
Mohamed Abdel-Maguid, an economist at BNP Paribia Bank, said that the Egyptian government will not float the pound at the present time, especially since it is not expected to attract the revenues it targets at a value of $2 billion from the government’s offering program, indicating that the flotation may happen in the future.
Financial forecasts shock the black market:
And Citigroup had previously expected that the central bank would postpone the decision to devalue the currency, at least until the end of June, due to the fact that any depreciation in the value of the currency would make the government unable to achieve targets by reducing the budget deficit to 6.5% at the end of the current fiscal year, in addition to Maintaining a stable debt value as a percentage of GDP.
And Mohamed Maait issued shocking expectations for dealers in the black market today, as he confirmed that he expects the stability of the value of the pound against the dollar before the end of December, in addition to recording tourism revenues at record levels at the end of the current fiscal year at a value of $ 14 billion, and that it has succeeded in paying off external debts worth $ 3.5 billion. dollars despite the circumstances it is going through, which confirms that Egypt has not and will not fail to pay its debts.
