The Central Bank of Egypt’s (CBE) decision on 21 May to raise interest rates by 200 basis points (2%) is a “slap” for investment in Egypt in general and the construction sector in particular, according to the executive director of Construction and Design (CONSTEC), Ashraf Abdel-Hakam. The Monetary Policy Committee (MPC) headed by CBE’s governor, Tarek Amer, issued a decision to increase the overnight deposit rate, overnight lending rate, and the main operation rate to 16.75%, 17.75%, and 17.25%, respectively. Moreover, companies wishing to expand and get new business through banks’ loans will be prompted by that decision to reconsider and delay expansion plans. CONSTEC’s executive director said that profit margins of contracting companies range between 4% and 5%. “I expect an increase in prices of housing units during the next phase, as companies will resort to load price increases to customers.”

Source: Daily News Egypt May 30, 2017 15:09 UTC