London, (Business News Report)|| The Egyptian Stock Exchange rose, on Monday morning, to its highest rise since July 2020, supported by purchases by local institutions.
The decline in the exchange rate of the Egyptian pound contributed by about 12%, to the rise in the Egyptian Stock Exchange, despite the fact that the Central Bank of Egypt raised interest rates by 1% for the first time since 2017.
The main index of the Egyptian Stock Exchange rose by 3.26% at 09:03 GMT to reach 11331.6 points, and the trading value exceeded 700 million pounds during the first hour of trading, which indicates an abundance of liquidity.
Shares of Commercial International Bank gained 2.8%, Hermes 1.3%, El Sewedy Electric 4.1%, Talaat Mustafa 6.25%, Oriental Weavers 9.4%, and Palm Hills 4%.
The Egyptian pound fell to 17.50 pounds against the dollar, by 07:50 GMT at the National Bank of Egypt, the largest government bank in the country. This is the first movement of the Egyptian currency in about 5 years.
The Egyptian pound’s move came after an extraordinary meeting today, Tuesday, in which the Central Bank of Egypt raised interest rates by 1% (100 basis points), in an attempt to absorb the wave of inflation. The last time the Central Bank of Egypt raised the interest rate was in 2017.
The Egyptian Stock Exchange data showed that the strong purchases during today’s transactions came with the support of local traders, whether individuals or institutions, while the transactions of Arab and foreign investors tended to sell.
The Central Bank of Egypt raised overnight interest rates in banks at 10.25% on term lending, and at 9.25% on deposit, and raised credit and discount rates by 100 basis points to 9.75%.
Financial analysts polled by Al-Sharq had expected the Central Bank of Egypt to raise interest rates by 1% (100 basis points).
November 2020 was the last time that the Central Bank changed interest rates, by cutting them 50 basis points out of a total of 400 points it cut during 2020. It was in 2019 that it cut interest rates by 450 basis points.