What is happening in the Egyptian economy these days? ?..Why did the Central Bank suddenly decide to withdraw huge liquidity from the market? How can this affect prices and inflation in our daily lives? All these questions are running through people’s minds, and it is clear that the coming days will be full of decisive decisions
The Central Bank of Egypt withdrew 792 billion pounds this week from 26 banks.. This number is not the first time it has happened. Last week, it also withdrew more than 1.3 trillion pounds.. Of course, the numbers are huge and the decisions are faster than ever before.. and this happened before the Monetary Policy Committee meeting. What we are all waiting for next Thursday
What is the point of all this?
Simply put, the central bank is trying to control the liquidity in the market. Because when there is a lot of money available, people spend more, and prices rise, and this increases inflation. The bank here does the opposite, reducing the money that flows into the market in order to calm the rise in prices and maintain the stability of the economy.
But what is strange is that there is good news in the midst of all this.. The annual core inflation rate fell from 25% in September to 24.4% in October.. This is considered an indicator that there is a slight improvement in controlling inflation.. but this does not prevent the central bank from completing He is cautious in his plan to ensure that prices actually calm down in the long term
Also, the Central Bank is not only reducing liquidity, but it has changed the method of accepting bids from banks… Before that, it was accepting a percentage of bids, but now it is accepting all of them on the condition that they are in line with the specified interest rate, which is currently 27.75%. The goal of this change is that the bank’s decisions reach the market in a way Faster and more effective
Ok, how can this affect us?
When liquidity decreases in the market, banks are forced to raise interest on deposits and certificates in order to attract money from people. This means that if you have money and put it in the bank, you will earn a higher interest, but at the same time, loans and financing will be more expensive, and this will affect anyone who thinks about taking a loan or opening a business. new
As for prices, these steps aim to gradually calm inflation, but we must be realistic. We may feel pressure in the short term because of these decisions.. Prices will not decrease overnight, but the Central Bank is clear that it is taking serious steps to achieve economic stability.
The Monetary Policy Committee meeting on Thursday will be the focus of everyone’s attention. Will the central bank decide to lower the interest rate or can it raise it further? Are the recent procedures sufficient or do we need additional steps? We will find answers to all these questions very soon
In the end, the Central Bank moves with a clear and specific plan to control inflation and protect the economy. The coming days will be full of challenges, but these decisions aim to ensure greater stability in the future.
