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J.P. Morgan forecasts another interest rate hike by CBE

It expects an additional 200 basis points later this month

What:

J.P. Morgan continues to play the role of the financial oracle, and its crystal ball forecasts the Central Bank of Egypt (CBE) hiking interest rates by an additional 200 basis points (bps) during its upcoming meeting later in March.

So What:

The inflation rate surged to 35.7% in February, defying expectations and posing significant challenges to the economy. J.P. Morgan’s projection suggests a proactive approach by the CBE to tackle inflationary pressures through monetary tightening.

Some Context:

The CBE issued treasury bills worth EGP 60 billion to finance budget deficits. These bills, with maturities of 182 and 364 days, carry interest rates exceeding 32%, reflecting the aftermath of the recent 600 bps interest rate hike by the CBE.