2% cut in interest rates coming down the road in February: Arqaam Capital

Arqaam Capital expected the Central Bank of Egypt to cut interest rates by 200 bases points, equal to 2%, in its February meeting. 
Deposit and lending interest rates remained at 18.75 and 19.75% respectively since the latest increase passed by CBE back in early July. 
" The CBE's tight monetary policy has delivered on the goal  of attracting cash flows, rendering fruitless any attempt at pursuing the same policy in the future," said senior economists at Arqaam Capital Reham El-Desouki, predicting the CBE to cut interest rates by 500 bases points. 
She forecast inflation to fall this December to 23%, then to 19% in January 2018. 
The Central Consensus and Statistics Authority said last Sunday that Egypt's yearly inflation has declined last November to 26% down from 31% in October. 
Regarding the economic growth rates, El-Desouki estimated rates to range around 4.5%, 5.5%, and 6.2% in 2018, 2019, and 2020 respectively should no tangible economic reforms and remarkable  hikes in manufacturing and exports take place. 
" Curtailing unemployment rates and achieving more sustainable growth rates will require deeper economic reforms." 
El-Desouki reiterated its previous forecasts suggesting EGP exchange rate against the USD to advance to EGP16.5 and EGP18 on the back of more USD inflows generated by hikes in number of tourists visiting the country, then to EGP18 and EGP16 with the return of Russian tourists, the rising USD sales led by institutions and citizens and remittances of Egyptian expatriates.