عربي English Türkçe اردو فارسى
Logo
Latest News
Business

HC Expects Central Bank of Egypt to Keep Interest Rates Unchanged

The headquarters of Egypt's Central Bank is seen in downtown Cairo, Egypt (Reuters)
The headquarters of Egypt's Central Bank is seen in downtown Cairo, Egypt (Reuters)
TT
TT

HC Expects Central Bank of Egypt to Keep Interest Rates Unchanged

The headquarters of Egypt's Central Bank is seen in downtown Cairo, Egypt (Reuters)
The headquarters of Egypt's Central Bank is seen in downtown Cairo, Egypt (Reuters)

HC Securities and Investment expected the Central Bank of Egypt (CBE) to keep interest rates unchaged during its Monetary Policy Committee (MPC) meeting scheduled for February 4th.

Head of macro and financials at HC, Monette Doss said that the agency expects January inflation to come in at 5.2 percent, near the lower end of the CBE’s new target range of 7 percent (+/-2 percent) for the fourth quarter of 2022.

She explained in a research note, which Asharq Al-Awsat obtained a copy of, that the Egyptian treasuries are now facing higher competition from Turkey which increased its policy rates by 200 bps on 24 December, taking its 15 months treasuries to 15.97 percent up from an implied rate of 10.66 percent previously.

Considering Bloomberg’s estimates, the 2021 inflation in Turkey stood at 12.2 percent and the Turkish treasuries now offer a 3.8 percent real return similar to Egypt’s real return of 3.8 percent.

Meanwhile, banking sector liquidity, as indicated by the CBE’s deposit auctions, declined to represent 11 percent of total local currency deposits in November from 13 percent in October.

“We also believe that currently, the high-risk business environment poses upward interest rate pressures.”

HC believes that even though the Egyptian economy has shown high resilience in absorbing the repercussions of the coronavirus pandemic, global uncertainty had its toll on tourism and export-related sectors, increasing their risk and also posing interest rate pressures.

“We expect the MPC to keep rates unchanged in its upcoming meeting on 4 February,” noted Doss.

During its meeting last December, the Monetary Policy Committee decided to keep rates unchanged after undertaking cuts of 50 basis points twice in its September and November meetings.

Egypt's annual inflation dropped to 5.4 percent in December from 5.7 percent in the previous month, with monthly inflation decreasing 0.4 percent month on month compared to an increase of 0.8 percent in November, according to data published by the Central Agency for Public Mobilization and Statistics (CAPMAS).

Most Viewed

 
 
Business

Taiwan’s Foreign Minister Welcomes Partnership with Saudi Arabia to Support Vision 2030 and High-Tech Industries

Taiwanese Minister of Foreign Affairs Lin Chia-lung (X)
Taiwanese Minister of Foreign Affairs Lin Chia-lung (X)
TT
TT

Taiwan’s Foreign Minister Welcomes Partnership with Saudi Arabia to Support Vision 2030 and High-Tech Industries

Taiwanese Minister of Foreign Affairs Lin Chia-lung (X)
Taiwanese Minister of Foreign Affairs Lin Chia-lung (X)

Taiwanese Minister of Foreign Affairs Lin Chia-lung emphasized that Taiwan attaches great importance to fostering strong economic and investment partnerships with Saudi Arabia and the broader Middle East.

He praised major regional development initiatives, led by Saudi Arabia's Vision 2030, and renewed Taiwan’s readiness to deploy its technological capabilities and resources to foster sustainable cooperation in advanced industries.

Lin made his remarks in response to questions posed by Asharq Al-Awsat newspaper, which covered prospects for economic and technological collaboration, investment opportunities under Vision 2030, Taiwan’s economic performance, as well as its position on regional geopolitical challenges and global energy security.

The Taiwanese Foreign Minister during the opening of a new Taiwan office in the city of Phoenix, Arizona (X)

Economic Cooperation with Saudi Arabia & Vision 2030

In response to a question regarding economic, industrial, and technological ties with the Kingdom, Lin highlighted the global transition from traditional oil-based economies toward digital technology, semiconductors, and artificial intelligence (AI).

"We are aware that Saudi Arabia is actively pushing forward with Vision 2030 and transitioning toward modern technologies. We believe Taiwan is the ideal partner for Middle Eastern nations in these sectors," Lin stated.

Addressing future investment plans, Lin noted: "We are currently looking for partner countries in the Middle East that are willing to engage in normal exchanges and interactions with us.”

“Whenever such engagement is established, we stand fully prepared to invest and allocate our resources—whether in Saudi Arabia, Oman, Qatar, or other friendly nations that maintain strong relations with our international allies,” he added.

Robust Economic Performance and Market Growth

Regarding Taiwan’s economic trajectory and challenges, Lin strong growth indicators, noting that Taiwan’s economy grew by 8.68% last year, with projections expected to exceed 11% this year, fueled by technological innovation and surging global demand for semiconductors and AI technology.

The minister further pointed out that Taiwan’s stock exchange has become the fourth largest in the world, outperforming major G7 economies such as France, the UK, and Italy.

In the semiconductor sector, he noted that major Taiwanese tech firms (such as TSMC) have secured orders stretching over the next five years, exceeding their current manufacturing capacity.

FILE - A worker walks past the logo of TSMC or Taiwan Semiconductor Manufacturing Corp., a Taiwanese multinational semiconductor contract manufacturing and design company, in Hsinchu, Taiwan, on Jan. 29, 2026. (AP Photo/Daniel Ceng, File)

Middle East Crises and Energy Security

Addressing questions regarding regional instability and energy supply routes through the Strait of Hormuz, Lin acknowledged that Middle Eastern conflicts affect Taiwan due to its reliance on imported energy.

However, he emphasized that Taiwan has taken proactive measures to diversify its energy sources by increasing purchases and investments from the United States and Australia, while expanding domestic investments in renewable energy to safeguard national energy security.

Lin reiterated that Taiwan has built significant resilience in risk management amidst geopolitical challenges, expressing the country’s eagerness to share these experiences and forge robust economic bonds with partners around the world.

Business

Gold Pauses Decline after Two-month Low as Traders Weigh US Fed Move

A 1000-gram gold bar at a gold and silver refinery in Vienna (AFP)
A 1000-gram gold bar at a gold and silver refinery in Vienna (AFP)
TT
TT

Gold Pauses Decline after Two-month Low as Traders Weigh US Fed Move

A 1000-gram gold bar at a gold and silver refinery in Vienna (AFP)
A 1000-gram gold bar at a gold and silver refinery in Vienna (AFP)

Gold prices steadied on Thursday after sliding to a two-month low in the previous session, as investors assessed the likelihood of another US Federal Reserve interest rate hike before year-end.

Spot gold was little changed at $4,116.67 per ounce by 0625 GMT. On Wednesday, bullion prices touched their lowest level since August 5 as a ‌firmer dollar and ‌higher US Treasury yields weighed on the ‌market.

US ⁠gold futures were ⁠flat at $4,140.70.

"The short-term investment case for gold remains challenged... We would need to see a break above $4,275 to become more constructive on the near-term upside," said Chris Weston, head of research, Pepperstone.

"If markets begin treating rising long-end yields as a reflection of sovereign credit and fiscal risk rather than stronger economic fundamentals, gold ⁠could start to diverge positively from bond yields ‌and the debasement trade could return ‌with greater force."

Fed policymakers were divided last month over the rationale for ‌raising interest rates, with "some participants" seeing a hike as needed ‌to keep the impact of energy and other price shocks at bay, but a more hawkish core viewing it as necessary to guard against emerging demand-driven inflation, minutes showed.

Traders see only a 19% chance ‌of a rate hike later this month, but are pricing in an 86% likelihood of ⁠an increase ⁠in December, according to CME's FedWatch tool.

Higher rates diminish the appeal of non-yielding gold.

The global economy is under threat from persistently high energy prices, record public debt and risks from the AI investment boom, International Monetary Fund Managing Director Kristalina Georgieva warned, urging governments to implement protective fiscal and monetary policy measures.

Among other metals, spot silver fell 1.9% at $59.01, platinum added 1.6% to $1,657.18 and palladium climbed 1.1% to $1,136.80.

"We see silver on a downward trajectory given the deteriorating chart patterns and expect a test of the 2026 lows in the mid to high $50s," Marex analyst Edward Meir said in a note.

Business

Oil Rises as Middle East Supply Concerns Persist amid Shipping Attacks

Oil rigs operating in the Kern River field in California, USA (Reuters)
Oil rigs operating in the Kern River field in California, USA (Reuters)
TT
TT

Oil Rises as Middle East Supply Concerns Persist amid Shipping Attacks

Oil rigs operating in the Kern River field in California, USA (Reuters)
Oil rigs operating in the Kern River field in California, USA (Reuters)

Oil prices rose on Thursday on persistent worries about supply from the key Middle East producing region amid an increase in attacks on shipping in the Gulf and the Strait of Hormuz, while the US cut output as a hurricane menaced offshore production.

Brent crude futures rose $2.28, or 2.28%, to $102.28 a barrel by 0427 GMT. US West Texas Intermediate (WTI) crude futures gained $1.66, or 1.88%, to $89.94.

Prices settled lower on Wednesday after the International Energy Agency agreed to accelerate the release of oil stocks and to prioritize diesel supplies under a plan launched in March, as governments seek to tackle record ‌fuel prices ‌and supply disruptions caused by the Iran war.

However, threats to oil shipping ‌in ⁠the Gulf and ⁠the Strait of Hormuz, which carried shipments equal to about 20% of global oil and fuel before the war, have increased in October as the US-Israeli conflict with Iran enters its eighth month, said Reuters.

Attacks on tankers sailing through the Strait of Hormuz hit their highest last week of any week since the Iran war began as Gulf producers increased exports. The expansion of attacks is occurring as more crude is flowing out of the Gulf but at higher costs and risk to cargoes and crew.

In the latest attack, a ⁠tanker north of Qatar was struck by multiple projectiles, causing casualties, the ‌United Kingdom Maritime Trade Operations agency said on Wednesday.

"The frequency ‌of Iranian attacks on ships is now at the highest point since the war began, and likely to ‌intensify further," said Saul Kavonic, MST Marquee head of energy.

He noted that "constrained product flows, extreme ‌logistics costs and high likelihood of Iranian escalation are keeping prices elevated".

ANZ analyst Daniel Hynes said in a note on Thursday the IEA's oil release would likely consist of barrels that were already part of the group's original 400-million-barrel release plan at the start of the Middle East conflict, meaning it does not appear to represent an additional ‌draw on strategic inventories.

"Ultimately, strategic stock releases can augment supply flows temporarily but do not create new production capacity," Hynes said.

HURRICANE CONCERNS

Prices are also gaining ⁠on supply curtailments as ⁠a hurricane moves toward offshore production areas in the US, the world's biggest oil producer, causing companies to shut their platforms.

Shell and Chevron said on Wednesday they were curtailing offshore operations in the Gulf as Hurricane Isaias approached.

Overall, US Gulf of Mexico oil and gas producers had shut in about 25.08% of current oil production and 16.37% of current natural gas production as of Wednesday because of the storm, according to the Marine Minerals Administration.

Inventory data from the US, also the world's biggest oil consumer, were supportive for prices as crude stockpiles fell by a higher-than-expected amount, while diesel inventories declined slightly.

Crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ended October 2, the Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for a 1.7 million-barrel decline.

Distillate fuel inventories, including diesel fuel and jet fuel, dropped by 42,000 barrels to 105.14 million barrels, well below their levels reported for this time of year in the past five years.