Expect the central bank’s Monetary Policy Committee to keep interest rates on hold when they meet on Thursday, Pharos Holding’s Ramy Oraby says. “We believe that the current disinflation trend will continue, leading the annual inflation rate downwards to 14.4% YoY in 4Q 2018, which is in line with the CBE inflation target of 13% YoY (± 3%) by 4Q 2018. This supports the MPC ease the current tight monetary stance, however, the timing remains conditional upon the materialization of three potential risks,” he says. Oraby says those risks are the surge in oil price, a higher real absorption of domestic demand growth, and the projected pace of the monetary policy normalization in advanced economies.

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