Fitch Expects Egypt to Cut Interest Rates by 2%

Fitch Ratings expects Egypt's central bank to cut interest rates by 2 percent by 2020.

Egypt's central bank will continue to cut interest rates by 200 basis points by the end of 2020, the International Credit Rating Agency's research center estimated in a report released on Friday.

Lower interest rates will reduce borrowing costs for local companies, a shift already started to boost commercial lending rates, which in turn will help boost momentum in private investment in the near future, the report said.

Fitch pointed out that lower inflation, which led to lower interest rates, will contribute to increasing demand for consumer goods, stressing that maintaining the sustainability of high growth rates in the medium term will require the continuation of structural reforms.

Earlier this month, the International Monetary Fund (IMF) maintained its outlook for the Egyptian economy at 5.9 percent this fiscal year.

Moreover, the World Bank raised its growth forecast for the economy this year to 5.6 percent, indicating that rates could continue to rise to 5.8 percent in 2020 and 6 percent by 2021.

Meantime, the IMF and the World Bank praised the results of the economic reform program implemented by Egypt over the past three years, which succeeded in enhancing the stability of macroeconomic indicators, as well as raising growth rates, reducing unemployment and reducing inflation rates, contributing to enhancing the confidence of the business community in the Egyptian market.

Fitch is an American credit rating agency and is one of the biggest institutions in this field beside  Moody's and Standard & Poor's.