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Hot money leaves Egypt after US rate hike
Dr. Medhat El-Sharif, a consultant in economics, dismissed the idea that a 0.25% increase in U.S. interest rates would lead to a significant outflow of hot money from Egypt, especially given the stability of the situation in the region. He explained that while the hike might encourage investors to move towards U.S. bonds, its impact on Egypt’s cash flows remains limited, as the increase is relatively small—particularly since further hikes are expected during the year. He also noted that the effects of interest rate hikes on the global economy include generally rising prices and reduced lending, as well as increased debt servicing costs. However, Egypt has not been significantly affected by Federal Reserve policies before. He emphasized that Egypt’s monetary policy has been flexible, with limited impact from previous rate hikes on inflation, as interest rates were kept stable for long periods. Additionally, the U.S.’s monetary policies are influenced by the midterm elections of Congress.
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