Interest rates.. this is how the Egyptians support the American economy from their pockets at the time of the coup

Disasters of the US Federal Reserve’s decision on Egypt..increase prices..the pound fell..increased inflation rates..investors fled

Interest rates.. this is how the Egyptians support the American economy from their pockets at the time of the coup

Although the United States of America takes decisions in the interest of its economy and aims to confront inflation and raise the standard of living of its citizens, the negative effects and repercussions of the US Federal Reserve’s decision to raise the interest rate by 75 basis points are reflected on the Egyptians, as if they are the ones who bear and offer the expensive and the cheap in order to advance the American economy. They live under a coup regime that sells all the country’s capabilities and property. This regime does not mind selling the Egyptians themselves until it obtains the approval of the Americans.

The disasters of the US Federal Reserve’s decision on Egypt are represented by a new wave of high prices, the rise in the prices of all goods and products, the depreciation of the pound against the dollar and foreign currencies, in addition to the increase in inflation rates and the flight of investors and the hot money that the Sisi regime is looking for to save it from bankruptcy.

The Central Bank of Egypt raised interest rates for the second time this year on May 19, by 2% to reach 11.25% for deposits and 12.25% for lending.

The Central Bank raised interest rates by 1% on March 21 during an exceptional meeting, coinciding with the offering of a high-return savings certificate of 18% at the National Bank of Egypt and Egypt, which was recently suspended after achieving the target proceeds from selling certificates worth 750 billion pounds.

The Monetary Policy Committee of the Central Bank is scheduled to hold a meeting at the end of the week Next, to discuss the fate of the interest rate, which observers expect to witness a new increase.

infernal circle

For his part, the economic expert, Dr. Abdul Nabi Abdul Muttalib, confirmed that the decision to raise interest rates was expected, as the US Federal Reserve decided to raise interest rates by 75 basis points to reach 1.75%, with the aim of controlling inflation rates that reached high levels not seen in the United States for nearly Half a century ago.

In press statements, Abdul Muttalib expected that the policy of raising the interest rate would continue in a gradual manner until the interest rate reaches 4% by mid-2023, stressing that the central banks in Europe will follow the example of the Federal Reserve by raising the interest rate.

He revealed that this decision raises the cost of funds available for investment, but reduces the volume of consumption, and reduces pressure on private and government purchases, and this in turn gives an opportunity to reduce demand and thus lower prices a little.

Abdel-Muttalib stressed that this step will compel the Central Bank of Egypt to raise interest rates and to reduce the value of the Egyptian pound.

He warned that these measures will raise prices in The Egyptian market increases the suffering of the Egyptians, stressing the need for the coup government to take urgent measures so that it can reduce the negative impact of the interest rate hike decision, by providing low-cost financing for vital projects, small and micro projects.

Abdul Muttalib called on the coup government to contribute to providing some production elements and inputs at good prices, and to take immediate measures to ensure that there is no chaos in the markets if it raises the interest rate or reduces the value of the pound, stressing that raising the interest rate will raise the costs of obtaining funds from For production, employment and investment, the devaluation of the pound will raise the prices of goods and services, raise the level of inflation, and threaten to enter the infernal cycle of inflation.

Emerging Markets

“The US Federal Reserve’s decision to raise interest rates will have repercussions on the global economy in general and the Egyptian economy in particular,” said Mohamed Abdel-Wahab, financial advisor to the Arab Union for Development and Development.

Abdel-Wahab confirmed in press statements that the US Federal Reserve’s decision will cast a shadow over global stock exchanges, as most of them are witnessing losses throughout this week’s trading, and the market values ​​of cryptocurrencies have plunged and reached their lowest levels in years, especially Bitcoin, which fell below $22,000 today, which is the lowest level. On the other hand, the dollar rose globally, and investors avoided risking their money, while gold prices consolidated, as it is a safe haven for investors in light of the uncertainty. That prevails in global markets and the uncertainty that dominates the economic scene currently.

He pointed out that the current interest levels in Egypt are able to absorb the Federal Reserve’s decision to raise interest rates, warning against any new interest rate hike because, according to inflation figures, the inflation rate continued to rise for the sixth month, reaching 15.3% in May, 15.3%, compared to 14.9% last April.

Abdel-Wahab warned that the US Federal Reserve’s decision to raise interest rates is putting great pressure on emerging markets, including Egypt, as it raises the cost of debt on them at a time when US Treasury bonds are attracting large investments that will affect foreign investment in emerging markets, stressing that the Fed’s continued raising rates The interest will actually affect the cost of debt in those markets.

Egyptian Pound

Economist Dr. Medhat Nafeh said, “All markets in the United States were expecting the US Federal Reserve to raise the interest rate by 0.75%, noting that the stock market indices were surprised by the rise in the interest rate, and therefore they declined.”

Nafeh explained in press statements that the bank interest rate is competitive with stocks, and therefore when it rises, the natural and direct effect in light of the stability of other factors is a decline in stock exchanges.

He added that all previous or upcoming hikes until the beginning of 2023 are almost expected because they are linked to the inflation rate, explaining that the United States has a target for inflation rates of 2%.

Nafeh revealed that with the increase in interest rates, the dollar becomes stronger, expecting interest rates to rise in Egypt after the US Federal Reserve’s decision.

He stressed that raising interest rates is inevitable in order for the Egyptian pound to face the major attack of foreign currencies after the US Federal Reserve’s decision.

Nafeh pointed out that Egypt is still in the eye of the storm and the effects of the Russian-Ukrainian war continue, stressing the need to strike balances between monetary policies through social protection measures for the lower-income classes.

Source: بوابة الحرية والعدالة by

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