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Egypt CBE sees possible interest rate decline


Farouk el-Okdah, the Central Bank of Egypt governor reported Sunday that there were strong indicators supporting a decline in interest rates, citing falling inflation and treasury bill yields
Okdah added that there were "strong indicators supporting a trend of decline in interest rates" but gave few specifics and did not say when the remarks were made, according to financial daily al Alam al Youm.

Okdah added that a decline in interest on some certificates of deposit and a drop in money supply were additional indicators of a potential decline.
A Central Bank official declined to comment on the accuracy of the report, saying Okdah was out of town and could not be reached to verify the newspaper's account.
Okdah forecast inflation dropping to less than 10 percent by the middle of 2009, in light of falling global commodities prices.
Okdah said last week that price stability remained the central bank's overriding objective, a message that could be seen as an attempt to dampen expectations of sharp interest rate cuts.
Some analysts have forecast the Central Bank of Egypt will cut rates by 300 to 400 basis points over the next 12 months to bolster Egypt's economy against the worst Global Financial Crisis in 80 years.
The Monetary Policy Committee (MPC) at the Central Bank of Egypt kept its main interest rates unchanged on November 6 at 11.5 percent and 13.5 percent, despite some expectations that it would cut them to stimulate growth.
Until the Global Financial Crisis intensified in September, the Central Bank of Egypt had been raising short-term interest rates in an attempt to reduce inflation, which peaked at 23.6 percent in the year to August. It has since fallen back to 20.2 percent.
EGYPT NEWS