Egypt says latest interest rate cut will save E£10-15 billion on budget

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Egypt says latest interest rate cut will save E£10-15 billion on budget

On Sunday, the 1st of September 2019, Egyptian government had issued a statement saying that the recent interest rate cut of 150-basis point would likely to save as little as 15 billion Egyptian Pounds ($908 million) in the third-largest African nation’s public budget.

In point of fact, the Central Bank of Egypt had trimmed overnight borrowing cost by 150 basis point last month to 15.25 per cent from a prior 16.75 per cent, which came as a surprise to many, as an analysts’ poll was expecting a 50-basis point cut.

Meanwhile, adding that the latest interest rate cut would cushion Egyptian capital market and proffer a much-required stimulus, Sunday’s (September 1st) government statement said, “Among the expected effects of the interest rate cuts are saving 10 to 15 billion pounds for the state budget, as well as providing a major stimulus to the Egyptian capital market and raising the stock market activity in the Egyptian stock exchange.

” Nonetheless, the Sunday’s (September 1st) did not specify how long the savings stemmed of a hawkish interest rate cut would be moderating impacts of a global scale slowdown. As a matter of fact, previously Egypt had forecasted its debt interest to reach 541.747 Egyptian pounds during the fiscal year 2019-2020 compared to a 437.448 billion Egyptian pounds at the same time a year earlier.