Egypt’s Central Bank Cuts Key Interest Rates by 100 Basis Points
The Central Bank of Egypt (CBE) cut its key interest rates by 100 basis points on Thursday as inflation pressures continued to ease.
Details of the Rate Cut
The Monetary Policy Committee (MPC) lowered the:
- Overnight deposit rate to 21.00%
- Overnight lending rate to 22.00%
- Main operation rate to 21.50%
- Discount rate to 21.50%
This marks a continuation of Egypt’s monetary easing cycle.
Inflation Trends in Egypt
Annual headline inflation slowed to 12.0% in August 2025, down from 13.9% in July. Core inflation also eased to 10.7% from 11.6%.
Monthly inflation was mild, with headline inflation at 0.4% and core inflation at 0.1% in August. Falling food prices and stable non-food prices contributed to the decline.
GDP Growth Outlook
Egypt’s economy expanded by 5.0% in Q2 2025, compared with 4.8% in the first quarter. For FY 2024/25, growth averaged 4.4%, a sharp improvement from 2.4% in FY 2023/24. Key growth drivers included non-petroleum manufacturing, tourism, and trade.
The MPC noted that output remains slightly below potential, which suggests limited demand-driven inflation risks under the current policy stance.
Future Inflation and Policy Guidance
Looking ahead, the CBE expects inflation to average 12–13% in Q3 2025, compared to 15.2% in the previous quarter. For 2025 overall, inflation is projected to average around 14% before gradually moving closer to the bank’s target range.
The MPC emphasized that policy decisions will be taken on a meeting-by-meeting basis, depending on data, forecasts, and risks.
The long-term goal is to steer inflation toward 7% (±2%) by Q4 2026 and 5% (±2%) by Q4 2028.
