Egypt To Cut Interest Rates on Deposits

As interest rates begin to fall domestically, the Ministry of Finance said that the government will rely on persifying sources of funding, including long-term financing instruments rather than short-term borrowings.

The ministry said in a statement on Friday that its target during the 2019-2020 budget is to issue medium and long-term bonds to increase the Maturity of the debt and reduce the risk of refinancing existing debt.

Over the next three years, the Egyptian government will seek to gradually reduce the government debt rate to 77.5% of GDP by the end of 2022.

The ministry explained that reducing the debt bill will provide more resources to be spent on the requirements of human development, such as education and health, which ultimately lead to improving the standard of living of citizens.

Economic research consultancy Capital Economics expects interest rates to fall to 10.75 percent by the end of 2020. In the meantime, the Central Bank of Egypt's Monetary Policy Committee (MPC) is scheduled to meet on August 22 to discuss interest rates cuts.

The Ministry pointed out that the government is working to achieve annual growth rates of not less than 6% on average with an annual surplus of 2%.

The statement pointed out that the gradual reduction in the rate of government debt through reducing pressure on interest rates will lead to a significant development in the sustainability of public finances and raise its ability to deal with any sudden changes in the domestic or global economies.