Arab FinanceThe attention of investors in Egypt is directed towards several investments at the present time, especially after the recent reducing the interest rate, as some go towards investing in gold While others believe that investing in the real estate sector will witness a popularity during the coming period, while another sector of investors considers investment in stock market Expecting its prosperity during the coming period.
For his part, Mustafa Al -Shaniti, Executive Director and Head of the Investment Banks Sector at Zella Capital Company, said in exclusive statements to Arab Finance that the recent decision of the Central Egyptian Bank to reduce the interest rate is the beginning of an expected stage of cash facilitation, and an end also for the stage of demand for investment in debt tools.
Expectations of repeated declines for interest during the year 2025
Al -Shaniti expected that the last reduction of the interest rate will be followed by other declines during the year 2025, noting that this will return to invest in capital, whether through investment on the stock exchange or investment funds, where the stock exchange is expected to witness a great prosperity and movement, noting that one of the best opportunities for investment is investing in the stock exchange.
Al -Shaniti added that gold is currently a safe haven for many investors around the world, especially in light of the economic tensions and changes resulting from the recent American decisions, and the trade war between China and America, as well as other effects related to American tariffs, indicating that gold is one of the less risk investment opportunities and has a suitable profitability.
Al -Shaniti explained that a movement is also expected to happen in Real estate investment After reducing the interest rate, as some investors are expected to put their capital in real estate investment, instead of investing in debt tools, savings and heading towards savings deposits. Lowering interest rates in banks will also reduce the cost of financing, and this will lead to the boom in this vital sector in Egypt.
While Dr. Ahmed Al -Khudrawi, Dean of the College of Business Administration at Al -Nahda University, believes that the interest rate has not yet decreased by the adequate amount that encourages savings to withdraw their money from banks, and direct these savings towards other investments where many bank customers depend on these monthly savings returns to achieve their investment targets.
Al -Khudrawi explained that in the event of an additional 5% interest rate from the current price, this will be encouraged towards directing investments to other sectors other than the debt tools such as investing in gold or heading towards investing in the stock exchange, and if there are some fears of the return of the dollar phenomenon again, which means the demand for buying the dollar and dealing with it instead of the Egyptian pound.
Expectations of the rise in gold prices
Al -Khudrawi stressed that many financial institutions expect gold to rise by the end of 2025 to about 4 thousand dollars for the ounce, especially with the direction of many central banks around the world, such as the Chinese Central Bank, and the Russian Central Bank towards buying large quantities of gold, where the price of gold today reached 3285 dollars and a candidate for the increase during the coming period.
For his part, Amir Rizk, an expert in the field of gold, said that international changes and the threat of US President Donald Trump to dismiss Jerome Powell, the head of the US Federal Reserve, recently affected the price of gold, its rise as a result of fear of interfering in monetary policy in America, which caused a state of fear, and the uncertainty among many investors on the American Stock Exchange, and made some head towards investing in gold.
He explained that despite the recent declines in the price of gold globally and locally, it is expected to rise again, as the safe and profitable haven is still in the long term for many investors, indicating that it is expected that the price of a gram of gold will exceed 7 thousand pounds in Egypt when the price of the ounce reaches about 4 thousand dollars.
For its part, Goldman Sachs Foundation raised the price of the price of gold by the end of 2025 from 3300 dollars an ounce to 3700 dollars an ounce, with an expected range ranging between 3650 and 3950 dollars, to indicate a stronger demand than the expected central banks, and the high investment funds circulated due to the risk of stagnation.
Gold prices have increased by more than 40% since January 2024, and the strong demand from central banks is expected to continue to support this rise to reach new record levels exceeding $ 3,000 per ounce, according to Goldman Sachs' expectations.
Reducing American interest may push gold to higher levels
Economists in Goldman Sachs also expected that the American Federal Reserve (the US Central Bank) would reduce interest rates twice this year, which will enhance gold as it does not have benefit, which makes it more attractive to investors.
They pointed out that these positive factors must compensate for any expected negative impact as a result of the speculators reducing their long centers in the futures markets.
ANZ also raised its forecast for the price of gold by the end of the year to $ 3,600 an ounce, and its expectations for the next six months to $ 3500 from $ 3200.
The bank pointed out that the increasing recession risk, the new shift in the geopolitical scene, global supply chains disorders, and fears of high inflation, as well as changing interest rate expectations, indicate that gold will remain strong in the near future.
The World Bank raised its expectations for the growth of the Egyptian economy by about 0.3% during the current fiscal year to 3.8%, while it was proven for the next fiscal year at 4.2%, with growth to 4.6% in the fiscal year 2026-2027. It is also likely to be in a report that inflation in Egypt record 20.9% during the current fiscal year, 15.5% in the next fiscal year, and 12.2% in 2026-2027.
The Monetary Policy Committee of the Central Bank of Egypt recently reduced interest rates for the first time in nearly 5 years (since 2020), after installing 7 consecutive times.
The Monetary Policy Committee of the Central Bank of Egypt approved its second meeting during the year 2025, a price of deposit and lending price for one night and the price of the main operation of the Central Bank by 225 basis points to 25%, 26% and 25.5%, respectively. It also decided to reduce the credit and discount price to 25.5%.
On February 20, 2025, the Monetary Policy Committee at the Central Bank of Egypt, at its first meeting, kept the first meeting during the year 2025, for the seventh time in a row, on the price of the return and lending for one night and the price of the main operation of the Central Bank at 27.25%, 28.25% and 27.75%, respectively. It also decided to keep the credit and discount price at 27.75%.
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