{"id":579318,"date":"2023-02-02T04:08:31","date_gmt":"2023-02-02T04:08:31","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/02\/02\/this-morning-the-fed-hiked-rates-yesterday-will-the-cbe-follow-today\/"},"modified":"2023-02-02T04:08:31","modified_gmt":"2023-02-02T04:08:31","slug":"this-morning-the-fed-hiked-rates-yesterday-will-the-cbe-follow-today","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/02\/02\/this-morning-the-fed-hiked-rates-yesterday-will-the-cbe-follow-today\/","title":{"rendered":"THIS MORNING: The Fed hiked rates yesterday. Will the CBE follow today?"},"content":{"rendered":"

Good morning, wonderful people, and a very happy THURSDAY. <\/strong>Don\u2019t relax just yet \u2014 it\u2019s already shaping up to be a very busy news day.<\/p>\n

DRIVING THE CONVERSATION here at home this morning:<\/strong> Prime Minister Moustafa Madbouly\u2019s announcement that stakes in no less than 20 state-owned companies will be offered to strategic investors, on the EGX, or both within the next year. We should get the names of those companies next Wednesday. Madbouly also announced fresh help from the government for real estate developers and more one-stop golden licenses for industry players.<\/p>\n

AND- The unicorn in the room: <\/strong>A whopping USD 200 mn investment from our friends at Abu Dhabi-based Chimera Investments has put homegrown super-app MNT-Halan on its way to unicorn status. More on all those stories below.<\/p>\n

WEEKEND WEATHER<\/strong>- It\u2019s staying cold (and wet in some parts): <\/strong>Expect daytime highs of 19\u00b0C and nighttime lows of 9\u00b0C in the capital, according to our favorite weather app and the Egyptian Meteorological Authority<\/a>. Our friends in Alexandria would be wise to keep their umbrellas handy, with light to medium rainfall forecast along the North Coast and in several other parts of the country through the start of next week.<\/p>\n

IT\u2019S INTEREST RATE DAY- <\/strong><\/p>\n

<\/a> The Central Bank of Egypt is expected to raise interest rates<\/strong> when it holds its first policy meeting of the year later today. Analysts we polled<\/a> last week forecast the Monetary Policy Committee to hike rates by 100-200 bps. The median estimate in a Reuters poll<\/a> is also for a 150-bps hike. The central bank raised interest rates by 800 bps last year to support the EGP and curb inflation in response to the economic crisis triggered by the war in Ukraine and tightening financial conditions globally.<\/p>\n

The Fed went with the Slightly Smaller Rate Hike we\u2019d all come to expect: <\/strong>The US Federal Reserve yesterday raised rates by 25 basis points to a target range of 4.5-4.75%, it said in a statement<\/a> following its two-day meeting. The US central bank had led the markets to expect the relatively smaller hike as it switches to a more moderate pace of monetary tightening in response to signs of cooling inflation and slowing growth. The Fed made four consecutive jumbo 75-bps hikes followed by a 50-bps hike last year, in a bid to temper record high inflation.<\/p>\n

What now? <\/strong>The Fed is staying hawkish in tone, vowing \u201congoing increases in the target range\u2026 in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.\u201d The jury\u2019s out as to whether that\u2019s just talk or if we can expect another hike at the Fed\u2019s next meeting on March 21-22<\/a>. Bloomberg Opinion\u2019s Robert Burgess makes a good argument<\/a> for why he thinks the Fed is now done with tightening, explaining how a \u201csufficiently restrictive\u201d policy rate may already have been reached.<\/p>\n

The ECB is also deciding on rates today: <\/strong>Europe\u2019s central bank is set to hike rates by 50 bps to 2.5% during its meeting today despite a drop in eurozone inflation in January as energy prices eased, Reuters<\/a> reports. Analysts see the drop in headline inflation doing little to ease the pace of monetary tightening, as a closely watched gauge of underlying inflation that excludes volatile items held steady at 5.2% last month.<\/p>\n

ALSO HAPPENING TODAY-<\/strong><\/p>\n

PM Madbouly in Senegal: <\/strong>PM Moustafa Madbouly is in Senegal\u2019s Dakar to participate in the two-day Dakar Financing Summit for African infrastructure development, which kicks off today, according to a cabinet statement<\/a>. The electricity, housing, and transport ministers and reps from local infrastructure firms are also attending the summit, which will give Egyptian private-sector firms the chance to participate in African infrastructure projects and advertise local projects to foreign investors, said Cabinet Spokesperson Nader Saad.<\/p>\n

A second World-Bank backed wheat buy: <\/strong>Traders need to submit their bids directly to state grain buyer GASC by midday for its second international grain tender this month and the second to be financed by the World Bank. GASC is seeking 30-60k tons of wheat for delivery in late February or March, according to its website<\/a>.<\/p>\n

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** <\/strong>TAKE OUR JANUARY ENTERPRISE READER SURVEY<\/a><\/strong> and get a chance to break bread <\/strong>with us:<\/strong> Give us your thoughts on how 2022 panned out for your business and industry, and what you\u2019re expecting in the year ahead in our Enterprise Reader Survey.<\/p>\n

We\u2019re asking you to share your expectations<\/strong> on the EGP \/ USD rate in 2023, how you\u2019re managing expenses amid the rising cost of living, where you see your industry as a whole heading, and whether you expect to make fresh investments \u2014 among a few other questions we ask our community on a regular basis. As is our custom, we\u2019ll be sharing the results with all of you in a few weeks\u2019 time to help you shape your view of the year.<\/p>\n

You can <\/strong>take the Reader Survey here<\/a><\/strong> \u2014 it won\u2019t take more than a few minutes to complete.<\/p>\n

Want to have a meal with us?<\/strong> Leave your name, email, mobile number, and where you work in the box for \u201cIs there anything else you want to tell us.\u201d We\u2019ll be inviting eight participating readers to a meal at one of our favorite restaurants.<\/p>\n<\/div>\n

SIGNS OF THE TIMES- <\/strong><\/p>\n

The tougher economy is now starting to be felt by top management at some US firms, <\/strong>after weeks of stories of employee layoffs sweeping tech and other sectors.<\/p>\n