{"id":663799,"date":"2025-04-15T00:00:00","date_gmt":"2025-04-15T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/04\/15\/standard-chartered-pushes-back-rate-cut-expectations-but-sees-a-bigger-may-cut\/"},"modified":"2025-04-15T00:00:00","modified_gmt":"2025-04-15T00:00:00","slug":"standard-chartered-pushes-back-rate-cut-expectations-but-sees-a-bigger-may-cut","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/04\/15\/standard-chartered-pushes-back-rate-cut-expectations-but-sees-a-bigger-may-cut\/","title":{"rendered":"Standard Chartered pushes back rate cut expectations \u2014 but sees a bigger May cut"},"content":{"rendered":"

Standard Chartered no longer expects the Central Bank of Egypt (CBE) to <\/strong>begin cutting interest rates this Thursday<\/strong>, forecasting instead that the Monetary Policy Committee will keep rates unchanged and start its easing cycle with a 200-bps rate cut in May. That\u2019s a shift from the bank\u2019s previous forecast of a 150-bps cut at this week\u2019s meeting, Standard Chartered MENA economist Carla Slim said at a presser attended by EnterpriseAM.<\/p>\n

With recent f<\/strong>oreign outflows from Egypt\u2019s debt markets, Slim expects the CBE to <\/strong>remain conservative.<\/strong> \u201cOutflows seem relatively manageable when looking at the interbank market, where volumes rose to a cumulative USD 3 bn,\u201d Slim said, adding this does not mean outflows hit USD 1 bn, but it provides an indication of recent activity. The lender expects this wave of hot money to reverse course soon.<\/p>\n

And even with mounting pressures, Standard Chartered expects Egypt\u2019s economy to <\/strong>grow at a 4.5-6% clip by the end of 2026. <\/strong>Inflation is seen cooling to an average of 10-15% in 2025 \u2014 even as energy subsidies are phased out \u2014 before reaching the target of 7% \u00b12 percentage points by 2026. As for the EGP, the bank ruled out a new float in the short term and expects the exchange rate to weaken slightly to EGP 52 against the greenback by the end of this year, and to EGP 54 a piece by the end of 2026<\/p>\n

Slim believes the MENA region is in a \u201cvery unique position\u201d compared to the rest of the <\/strong>world when it comes to tariffs<\/strong>, with Gulf-Asia trade ties expected to cushion the impact of US tariffs \u2014 potentially even fueling a regional growth bump. The impact of US tariffs on MENA trade is expected to be limited over the next three months, as the decision coincides with OPEC\u2019s move to ramp up oil production. The region exports an estimated USD 50 bn worth of goods to the US \u2014 half of which are petroleum products that were excluded from the new tariff regime. <\/p>\n

That said, the bank sees three key indirect risks to MENA economies stemming from the<\/strong> tariff war:<\/strong><\/p>\n