Egypt’s Central Bank Cuts Interest Rates by 1%

The Central Bank of Egypt (CBE) announced a 100 basis point cut in interest rates during its Monetary Policy Committee meeting on Thursday.

The overnight deposit rate was reduced to 24.00%, the lending rate to 25.00%, and the main operation rate to 24.50%. The discount rate was also lowered to 24.50%.

The CBE attributed the decision to easing global and domestic inflation, improving growth outlook, and reduced external and fiscal risks. Global growth projections have slowed due to supply chain concerns and trade policy uncertainty, prompting many central banks to adopt more cautious approaches.

Domestically, real GDP growth is expected to reach 5.0% in Q1 2025, up from 4.3% in Q4 2024, while inflationary pressures remain moderate. The unemployment rate dropped slightly to 6.3%. Headline and core inflation slowed to 13.9% and 10.4% respectively by April, driven by lower food prices and a fading base effect.

The CBE noted inflation is expected to continue declining throughout 2025 and into 2026, though fiscal consolidation and stable non-food prices may slow the pace of disinflation.

While upside risks remain—from trade protectionism and geopolitical tensions—the risk environment has improved since April, supporting continued monetary easing.

The committee said it will review data at each meeting and act as needed to guide inflation toward the target of 7% ±2% by Q4 2026.