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00:00 In Egypt, the Central Bank is expected to meet in February 8.
00:07 This meeting is expected to establish the Central Bank's current interest rates.
00:15 But this is a policy that some economists see as a change in light of the current severe weakness of the Egyptian currency.
00:28 Let's take a look at a report by CNBC on the Central Bank's moves on interest rates in February.
00:38 Most of the analysts who were interviewed by CNBC said that 60% believe that the Central Bank will establish interest rates at its current level,
00:49 which is 19.25% for lending and 20.25% for borrowing.
00:54 But when will the Central Bank reach its current level of interest rates?
01:03 60% believe that the second half of 2024 will see the level of interest rates,
01:10 indicating that the Central Bank may pay more interest rates in the second half.
01:18 The Central Bank may take measures that we have seen in the past,
01:26 such as lowering the exchange rate and increasing interest rates.
01:34 50% believe that the level of interest rates will increase from 1% to 4% in 2024,
01:43 4% to 7% believe that the level of interest rates will increase from 30% to 20%,
01:49 and 10% believe that the level of interest rates will increase from 10% to 10% in 2024.
01:57 The current level of interest rates is at its highest level in 29 years, 19.25%.
02:04 The Central Bank has increased interest rates six times since 2022 and even in 2023.
02:13 But these interest rates clash with very high inflation rates.
02:18 The inflation rate even declined in the last reading in December, which was at 33%.
02:25 But this indicates that the real interest rate is -14.5%.
02:31 This clearly affects the value of the currency and the purchasing power of Egyptian pounds.
02:39 The Finance Minister, according to the 2023-2024 balance sheet,
02:44 says that each one in the 100% will be increased in interest rates,
02:48 which will cost the Egyptian government 70 billion extra pounds as a debt collector.
02:56 The Egyptian government is, of course, the largest borrower of banks,
03:00 and the value of the debt collector and the cost of the debt may reach more than 1.1 trillion pounds
03:06 according to the Egyptian Finance Minister.
03:09 This is why the Egyptian Central Bank is very careful and cautious
03:15 in increasing interest rates as one of the reasons that increase the balance sheet.
03:21 Debt, of course, has a problem with the exchange rate in Egypt.
03:27 This puts a lot of pressure on the Central Bank, the government,
03:34 and the entire Egyptian economic system to solve the exchange rate crisis.
03:39 Recent analysis by the SNP suggest that the government will reduce the exchange rate
03:47 to what is close to the equivalent market, which has an exceeding exchange rate of more than 60 pounds,
03:54 which the SNP estimates at the moment is 60 pounds per dollar.
03:57 The direction, according to the SNP, is that the government will reduce the exchange rate
04:03 to about 60 pounds to deal better with the dollar crisis.
04:10 The SNP had expected that the exchange rate would be between 40 and 45 pounds per dollar.
04:16 Modes is 45 pounds per dollar.
04:18 But in general, in light of the economic instability in Egypt and the great pressure,
04:23 there are reductions, as we saw in the credit rating for Fitch.
04:27 There was a B- and that was in November.
04:30 Modes lowered its view to a negative one.
04:33 Citigroup recently talked about lowering the view of the dollar bonds issued in October
04:40 from the increase in the weight that was announced before the presidential elections
04:45 to the market weight in 2024.
04:50 So, in light of the difficulties facing the Egyptian economy at the moment,
04:55 the Central Bank of Egypt will remain on the interest rates and will maintain
05:00 and maintain its monetary policy at the moment
05:03 so as not to burden the government with more pressure on its balance sheet.