{"id":557987,"date":"2021-09-16T13:44:28","date_gmt":"2021-09-16T13:44:28","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/09\/16\/tonight-mpcs-interest-rates-decision-fed-next-week-also-your-morning-cup-of-jo-is-getting-more-expensive-gameweek-5-in-the-premier-league-this-weekend\/"},"modified":"2021-09-16T13:44:28","modified_gmt":"2021-09-16T13:44:28","slug":"tonight-mpcs-interest-rates-decision-fed-next-week-also-your-morning-cup-of-jo-is-getting-more-expensive-gameweek-5-in-the-premier-league-this-weekend","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/09\/16\/tonight-mpcs-interest-rates-decision-fed-next-week-also-your-morning-cup-of-jo-is-getting-more-expensive-gameweek-5-in-the-premier-league-this-weekend\/","title":{"rendered":"TONIGHT: MPC\u2019s Interest rates decision + Fed next week. ALSO: Your morning cup of Jo is getting more expensive + Gameweek 5 in the Premier League this weekend."},"content":{"rendered":"

We close out a heavy news week with a big sigh of relief<\/strong>, ladies and gentlemen. Sahel season may be over, but it's still sunny and lovely in other beach spots. We\u2019re anticipating a few good weeks of beach weather before we have to all clam up.<\/p>\n

<\/a> THE BIG STORIES TODAY (so far)-<\/strong><\/p>\n

#1- A big push for our energy hub plans:<\/strong> Technical committees from Egypt and Cyprus have agreed to begin studies that would pave the way for gas from Cyprus\u2019 Aphrodite field to be sent to Egypt\u2019s liquefaction plants for re-export, the Cypriot press<\/a> is reporting this morning.<\/p>\n

#2- Plans to link our electricity grid with Saudi Arabia also got a big push forward<\/strong>, with Electricity Minister Mohamed Shawky announcing on Extra News yesterday<\/a> that Egypt and KSA signed new contracts that would see 2 GW of electricity exchanged between the two countries. Reports<\/a>are also out that tenders for the project are underway. The project\u2019s inauguration, previously slated for 2020<\/a>, was delayed<\/a> after Saudi\u2019s USD 500 bn Neom City mega project derailed plans.<\/p>\n

#3- Investments in tourism: <\/strong>Egypt will feature heavily in hotel management company Radisson Hotel Group\u2019s plans to open 50 hotels in North Africa by 2025, Alban Mabille de Poncheville, director, development, North Africa, tells Hotelier Middle East<\/a>. The company appears to be targeting Cairo and the New Administrative Capital.<\/p>\n

^^ We\u2019ll have more on all of these stories<\/strong> in tomorrow<\/sup>\u2019s edition of Enterprise AM<\/strong>.<\/p>\n

<\/a> HAPPENING NOW- It\u2019s interest rate decision time:<\/strong> The Central Bank of Egypt\u2019s Monetary Policy Committee (MPC) is set to announce its decision on interest rates later today, and we don\u2019t expect to hear anything until around 6pm. Everyone and their mothers are expecting the CBE to hold on interest rates, including 10 analysts we polled earlier this week<\/a>. A poll of 13 economists by Bloomberg<\/a> also unanimously expects the MPC to hold off on moving rates, saying that Egypt\u2019s high real rates \u2014 the highest in the world \u2014 should largely shield it from any impact a tapering by the Fed could have on emerging markets.<\/p>\n

Where rates currently stand: <\/strong>The overnight deposit rate is at 8.25%, the lending rate at 9.25% and the main operation and discount rates are at 8.75%. The central bank slashed rates by 400 bps last year, including an emergency 300 bps cut<\/a> in March, to protect the economy from the fallout from covid-19. It has since maintained rates for six consecutive meetings, including its most recent in August<\/a>, amid concerns about an increase in inflation. Annual urban inflation hit its highest level in nine months in August on the back of rising food, fuel and transportation costs, with headline inflation rising to 5.7%<\/a> in August, up from 5.4% in July.<\/p>\n

Beyond inflation, the clear fear today is the potential for the US Federal Reserve to wind <\/strong>down its covid stimulus. <\/strong>It certainly was at the top of the risks noted by local economists and analysts we interviewed. Last week, Finance Minister Mohamed Maait echoed<\/a> the sentiments of some economists that Egypt should be able to withstand the Fed tapering better than other EMs.<\/p>\n

The Fed will meet to review interest rates on 21-22 September.<\/strong> Pressure<\/a>has been building on the Fed to take a more hawkish stance to combat inflation by bringing its stimulus program to a premature end and start raising interest rates earlier than planned. But a slight slowdown in US consumer price inflation last month<\/a> and a poor jobs report in August could give the Fed a breather and relieve pressure for a policy change.<\/p>\n

Another sign we\u2019re still a carry trader\u2019s dream destination: <\/strong>Egypt\u2019s local currency debt was a prime example of an attractive emerging market asset, Denise Simon, co-head of emerging market debt at Lazard Asset Management, said at the annual JANA Investment Advisors conference, according to Australia\u2019s Financial Review<\/a>. She sees clear skies for emerging markets coming out of the pandemic, saying that \u201cemerging markets growth is catching up and is expected to surpass US growth in 2022.\u201d<\/p>\n

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