Egypt Cuts Inflation to 12% as Reserves Rise to $52.6bn, Central Bank Says

Egypt’s Central Bank Governor Hassan Abdalla said Egypt has succeeded in sharply reducing inflation to around 12% and raising foreign currency reserves to $52.6 billion, highlighting what he described as growing confidence in the Egyptian economy following recent monetary reforms.

Abdalla was speaking during his participation in the second edition of the AlUla Conference for Emerging Market Economies, organised by Saudi Arabia’s Ministry of Finance in partnership with the International Monetary Fund. The event was attended by Saudi Finance Minister Mohammed Al-Jadaan, IMF Managing Director Kristalina Georgieva, central bank governors, finance ministers, senior officials from international financial institutions, and leading global experts.

Held under the theme “Aligning Economic Policies to Support Emerging Market Economies Amid Global Trade Challenges and Monetary Shifts,” the conference focused on rapid changes in the global economy and their implications for emerging markets, particularly in trade, monetary systems, financial stability, and macroeconomic policymaking.

Abdalla took part in two sessions, including a panel on monetary policy amid structural transformations in the global economy. During his remarks, he outlined Egypt’s economic reform programme launched in March 2024, which centres on a full transition to inflation targeting alongside the adoption of a fully flexible exchange rate regime.

He said the shift represents a fundamental change in Egypt’s monetary policy framework, with the Central Bank’s role now focused on building a strong institutional framework rather than managing a fixed exchange rate. Abdalla stressed that the governor’s role is not to push the currency up or down, but to ensure a resilient system that allows the exchange rate to respond freely to supply and demand.

According to Abdalla, these policies have helped bring inflation down from nearly 40% to about 12%, while strengthening foreign reserves to $52.6 billion, developments he said have played a key role in restoring market confidence and improving economic stability.