Bulge bracket investment bank Morgan Stanley has lowered its growth outlook for Egypt, writing in a research note seen by Asharq Business that it expects the economy to expand at a 4.2% clip during FY 2023-2024, down from 5.0% previously. This comes less than a week after the IMF revised downwards its 2024 growth forecast to 4.1% from 5.0%.

Another deval incoming: Morgan Stanley analysts expect another EGP devaluation in September or October, coinciding with when it expects the IMF to go ahead with its first review of the USD 3 bn loan program, Masrawy reports. The bank expects the Central Bank of Egypt (CBE) to hike interest rates by another 200 bps to 20.25% alongside the devaluation.

We could be looking at another uneventful MPC meeting this week: Morgan Stanley is expecting the Central Bank of Egypt to leave rates unchanged when it meets on Thursday, citing the government’s recent progress with its privatization agenda and its impact on stabilizing the exchange rate, according to Masrawy. The central bank has left interest rates on hold in the previous two MPC meetings.

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