CAIRO: The Central Bank of Egypt (CBE) kept its key overnight interest rates unchanged on Thursday, saying commodity prices appear to be falling and economic growth is likely to recover in the fiscal year that begins next week.
As expected, the bank’s Monetary Policy Committee (MPC) left the lending rate steady at 19.25 percent and the deposit rate at 18.25 percent. Not one of 17 analysts polled by Reuters on Monday had forecast a change.
“Leading indicators for 2023 Q1 point toward a slowdown of real GDP growth,” the MPC statement said. “Real GDP growth is expected to slow down in fiscal year 2022/23 compared to the previous fiscal year, before recovering thereafter.”
The MPC said international commodity prices were likely to continue declining.
Headline inflation surged to an annual 32.7 percent in May, just short of an record high, from 30.6 percent in April. Month-on-month, inflation jumped to 2.7 percent from 1.7 percent in April.
Economic growth meanwhile eased to 3.9 percent in the fourth quarter of 2022 from 4.4 percent in the third quarter, the MPC said.
“Leading indicators for 2023 Q1 point toward a slowdown of real GDP growth.”
Expectations of a rate increase were dampened after President Abdel-Fattah El-Sisi last week appeared to rule out any imminent devaluation of the currency, even though the pound has been trading at about 38 to the dollar on the black market compared with the official rate of 30.9 pounds.
Since Russia invaded Ukraine in February last year, causing investors to withdraw billions of dollars from the Egyptian treasury market, the central bank has raised rates by a cumulative 1,000 basis points and allowed the currency to fall by half.

RIYADH: The market capitalization of the Tadawul All Share Index surged to over $2.9 trillion in June, up from $420 million in 2015, according to a report by S&P Global Ratings.  

The firm suggested that the increase indicates solid economic fundamentals and positive investor sentiment in Saudi Arabia.

Tadawul and the Capital Market Authority have launched several initiatives to expand the capital market in recent years as the Kingdom seeks to diversify its economy in line with the Vision 2030 initiative. 

These included streamlining the listing process and making significant investments in market infrastructure. 

These institutions approved regulations to ease foreign investors’ access to Saudi capital markets and implemented policies to improve corporate governance standards and transparency.  

“Even if we were to exclude the contribution from the market capitalization of Saudi Aramco, market capitalization has almost doubled since then (2015),” said Dhruv Roy, credit analyst at S&P Global, in a statement. 

Saudi stocks gained international exposure in 2019 after being added to the MSCI Emerging Markets Index, FTSE Russell, S&P Dow Jones, and other indices.  

By market capitalization and trading volume, Tadawul is the biggest stock market in the Middle East and North Africa region.   

The initial public offering of Saudi Arabian Oil Co. in 2019 was a significant event, and several other Saudi entities have entered the equity market since then.   

S&P Global Credit Analyst Timucin Engin stated: “Given the significant economic transformation expectations and funding needs associated with Vision 2030, we expect Saudi debt market evolution to potentially outpace that seen in some other developed markets.”  

“Government-related entities, major financial institutions, and key blue-chip corporates will initially lead the way,” he added.  

The report, titled “Saudi Arabia’s Debt Market: Ready For Takeoff,” suggested a robust and high-quality local debt market is essential for the economy to grow and change and support the funding requirements stemming from large Vision 2030 projects.