I wonder what will happen in the markets in the coming period? Will the central bank change the direction of interest rates? If this happens, what effect will this have on gold prices? Will the dollar go up or down? These are all questions that are preoccupying the market, and everyone is waiting for the Monetary Policy Committee’s decision tomorrow and wants to know what will happen
Anticipation in the market is currently at its highest levels.. All eyes are directed to the Monetary Policy Committee meeting, and the reason is simple. The decision that will be issued by the committee tomorrow may change the shape of the economy in Egypt in the coming period.
The Central Bank raised interest rates more than once this year to confront inflation, which increased due to global economic conditions as well as internal changes.
The question that everyone is asking now: Will the central bank continue to raise interest rates? Is it possible for there to be a stabilization or even a sudden reduction?
All expectations say that the committee may be inclined to confirm the interest in this meeting.
Why fix it and not lower it?
Inflation in October was lower than expected, and this encourages caution before any new decision, but, at the same time, the Central Bank cannot take any risks if it finds that inflation is still a threat to economic stability. There is also a very important factor, which is the impact of the decision on foreign investment. If interest rates rise further, it may attract new investments in debt instruments, but in return, it will increase the cost of financing for the government and companies.
What is the impact of the expected decision on gold?
The price of gold in the Egyptian market is closely linked to the price of the dollar and international gold prices. If the central bank decides to raise the interest rate, this may strengthen the pound a little against the dollar and this will put pressure on gold prices locally, but keep in mind if investors feel any concern, gold globally may rise as a safe haven and this will have an impact. We are here even if the pound is strong
As for the dollar, the expected decision could play a major role if the interest rate remains stable or decreases. The dollar may rise a little due to the increase in demand for it in the market, but if the central bank surprises us and raises the interest rate, it may calm the demand for the dollar and bring it back one step lower.
Conclusion: The entire market is in a “wait and see” mode. The decision of the Central Bank is undesirable. Not only will it affect large investors, it will affect everything from the beginning of the price of gold that we buy for savings to the prices of the goods and services that we deal with every day. All people are asking: Will the Central Bank have the audacity to take risks, or will it choose the safe path?
Wait for the decision tomorrow, and if you want an immediate analysis and the impact of the decision on the market, stay tuned and we will inform you of everything new.
