Following the US federal policy in the successive interest payments, the most recent of which was raising the American interest at a time-fourth rate of 75 basis points to reduce the unprecedented inflation, the emerging economies suffered the greatest effects from the crises’ negative effects on the global economy and a significant decline in exchange rates.
And the Egyptian economy was not immune to these events, especially since the Egyptian state is one of the most consumed countries, as well as its import of basic commodities and the initial materials necessary for many industries for the local market and export abroad, what the Egyptian central returned to follow a more strict monetary policy to curb inflation on the one hand and fill the financing gap from the dollar On the other hand, in order to stay up with American federal policy, the interest rate was increased by 0.
the central interest in deposit and lending by 2% in an exceptional meeting reached at bank interest rates for one night at 13. 25% deposit and 14. 25% for lending, after the inflation rate continued to record its high levels, where in September 8. 2% compared to 8. 3% in August. This is the fourth time in a row that the inflation rate has reached a level between 3. 75% and 4%.
The presence of investment certificates with the same percentages and a greater number of them reduced the influence of this on the stock exchange, thus it happened in conjunction with the deregulation of the exchange rate and a flexible policy based on supply and demand.
Ayman Fouda, a financial market expert, stated that in this situation, increasing interest rates won’t have a negative impact on the money market as well, with a more favourable outcome for stock prices, particularly for foreign investors, given that the price of the pound relative to the dollar dropped by more than 16% following the most recent central decision in a way that restores shares.
After more than a year of nonstop sales, Egyptian currency has become more appealing to overseas buyers looking to make a purchase. Trading prices have grown while bypassing millionaires in certain sessions. 43 trillion pound.
Ayman Fouda anticipated that the stock exchange would continue to perform well due to the activity of the arrows leading to institutional purchases made by both local and foreign buyers, which would be strengthened by the continued application of the Egyptian Economic Conference’s recommendations to improve the effectiveness of the money market and prepare it to accept new proposals to make the stock exchange an important venue for financing the nation’s businesses.
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Is the performance of the Egyptian market reflected in the banks’ increasing interest rates?
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