{"id":556921,"date":"2021-10-28T13:43:41","date_gmt":"2021-10-28T13:43:41","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/10\/28\/tonight-all-eyes-are-on-the-cbes-interest-rate-decision-egycomex-on-track-to-go-live-in-2022-the-global-chip-shortage-weighs-on-automotive-earnings\/"},"modified":"2021-10-28T13:43:41","modified_gmt":"2021-10-28T13:43:41","slug":"tonight-all-eyes-are-on-the-cbes-interest-rate-decision-egycomex-on-track-to-go-live-in-2022-the-global-chip-shortage-weighs-on-automotive-earnings","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/10\/28\/tonight-all-eyes-are-on-the-cbes-interest-rate-decision-egycomex-on-track-to-go-live-in-2022-the-global-chip-shortage-weighs-on-automotive-earnings\/","title":{"rendered":"TONIGHT: All eyes are on the CBE\u2019s interest rate decision + Egycomex on track to go live in 2022 + The global chip shortage weighs on automotive earnings"},"content":{"rendered":"

<\/a> It\u2019s interest rate day, <\/strong>and all eyes will be on the Central Bank of Egypt as its Monetary Policy Committee meets today to decide on interest rates. The prevailing wisdom is that rates will remain unchanged, with all 12 analysts and economists we surveyed<\/a> expecting the CBE to maintain its cautious approach for an eighth consecutive meeting, despite rising global inflation as energy prices skyrocket.<\/p>\n

Look for inflation and protecting foreign inflows to be top-of-mind for policymakers at today\u2019s meeting:<\/strong> Annual headline inflation hit a 20-month high in September<\/a>, as international oil and commodity prices had knock-on effects on domestic prices and coincided with the government\u2019s plans to slash its subsidy bill. But policymakers will need to balance their concerns on inflation with the need to protect the all-important carry trade and maintain portfolio inflows. Egyptian debt currently offers some of the highest real interest rates in the world, a fact that has kept foreign inflows high and contributed to stability in the EGP to USD exchange rate.<\/p>\n

The CBE\u2019s meeting comes on the heels of the European Central Bank <\/strong>deciding to keep<\/a><\/strong>interest rates on hold<\/a><\/strong>, saying that it won\u2019t raise rates until inflation stabilizes at its 2% target in the medium-term. The ECB still maintains that the current spike in inflation is \u201ctransitory,\u201d leading investors to pencil in a 20 bps interest rate hike over the course of a little more than a year, according to Bloomberg<\/a>.<\/p>\n

The transitory nature of inflation just made itself apparent in Europe\u2019s natgas prices<\/strong>, which cooled off, in response to Russian President Vladimir Putin instructing state-backed giant Gazprom to fill European storage sites in Germany and Austria next month, according to Bloomberg<\/a>. Improved gas flow from Norway as well as promises to increase exports, coupled with dropping Chinese coal prices, are also contributing to the downward trend, analysts tell the business information service. One analyst speculated that the decision may be connected to a Tuesday announcement by Germany\u2019s Economy Ministry that the \u201ccertification of Nord Stream 2 wouldn\u2019t pose any risks to security of supply.\u201d There have been murmurs that Russia has been withholding gas to force through the certification of the pipeline, which will transport natural gas from Russia into the EU.<\/p>\n

The MPC\u2019s decision should be out by 6pm CLT today.<\/strong> We will have detailed coverage on the decision in Sunday\u2019s EnterpriseAM<\/strong>.<\/p>\n

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THE OTHER BIG STORIES TODAY-<\/strong><\/p>\n

<\/a> #1- Egycomex is still on track to go live early next year:<\/strong> Egypt\u2019s long-awaited commodities exchange (Egycomex) appears to be on track to begin operations at the beginning of 2022, with Supply Minister Ali El Moselhy signaling<\/a> that we should expect an announcement soon which commodities will be traded on the exchange. El Moselhy is also set to iron out the final details and procedures to launch the exchange with EGX boss Mohamed Farid and head of the Internal Trade Development Authority Ibrahim Ashmawy next week.<\/p>\n

#2- We\u2019re getting a fresh <\/strong>USD 360 mn loan<\/a><\/strong> from the World Bank<\/strong> to support our post-covid economic recovery, with a potential equivalent package from the Asian Infrastructure Investment Bank on the way. The World Bank loan will be geared towards supporting sustainable and inclusive growth, as well as creating private sector jobs.<\/p>\n

^^ We\u2019ll have more on these stories and more in Sunday\u2019s edition of EnterpriseAM.<\/strong><\/p>\n

** CATCH UP QUICK<\/strong> on the top stories from today\u2019s EnterpriseAM<\/strong>:<\/p>\n