Saudi Arabia’s interbank rates hit their highest level in over two decades this week and, if officials want to prop up credit growth, the Saudi Central Bank may need to step in once more to provide liquidity. Elsewhere, Egypt inflation rose to a near six-year high in May, but the central bank will probably hold fire once more next week from raising interest rates. Further out, we think the monetary tightening cycle will resume by year-end, particularly if the pound is devalued again. Finally, the EU proposed a loan to Tunisia if it adopts IMF-mandated reforms – but we doubt that officials will agree to these.
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