Last week, we asked Egyptians if they would still invest even with bank interest rates are on the rise. And the outcome was complicated yet expected. In the coming few lines, we will simplify and share the outcome of our research and comment on it.
Yes, but Where?
While many have expressed their interested in investing in Egypt in general, the majority is skeptical about investing in Egyptian businesses because of the relatively controlled by a ceiling and risky expected return compared to banks’ almost risk-free returns.
Yes, but When?
The other popping question is when. A seasoned investor would choose to invest when everybody else isn’t where they see the opportunity. This assumption is based on the fact that the investor has also a safety net to fall on and that they are not risking all their budgets in such an environment, which is not the case with small inexperienced investors, whom we surveyed. Most of our respondents were wondering whether their investment is requested immediately or within 6 months as this changes the equation a lot.
Decision makers in fiscal and monetary policy haven’t made any statements regarding the near or long-term future of interest rates but it is a mathematical fact that inflation will drop in November (same month the inflation spike took place last year), pushing interest rates to drop as well. However, between today and November, we are not sure what will changes would occur to interest rates both in state-owned or other banks in Egypt.