- Decision
- Maintain
- Rate change
- 0 bps
- overnight deposit rate
- 21%
The Monetary Policy Committee of the Central Bank of Egypt on 20 November 2025 kept the overnight deposit rate at 21.00%, lending rate at 22.00%, main-operation rate at 21.50% and the discount rate at 21.50%, opting for a “wait-and-see” stance as higher October headline inflation of 12.5% y/y and core inflation of 12.1% point to lingering price pressures even as GDP growth accelerated to 5.2% in Q3 from 5.0% in Q2 and unemployment ticked up to 6.4%. The decision follows cumulative policy-rate cuts of 300 bp in August and October. The corridor is unchanged at 100 bp around the main operation rate. The central bank projects headline inflation will rise further when energy price adjustments feed through late in Q4 2025 before easing during H2 2026 toward its 7 ± 2 ppt Q4 2026 target; upside risks stem from geopolitical tensions, supply-chain disruptions, services inflation and administered-price passthroughs. Global growth is recovering but clouded by trade-policy uncertainty, while oil prices are broadly stable and agricultural prices declining. The Committee will continue to decide policy “meeting-by-meeting” and signalled readiness to adjust instruments as needed to contain inflation and anchor expectations.
Rate evolution
From July 2025 to February 2026, the Central Bank of Egypt lowered its key policy rates by 500 basis points, moving from an initial hold to cuts in August, October, December and February before holding them at subsequent meetings through September 2026. The cuts were supported by falling headline and core inflation, softer monthly price dynamics, improving inflation expectations and limited demand-side pressures, although November’s hold interrupted the easing path after headline and core inflation re-accelerated, led by non-food and services prices.
On August 20, the Committee kept the overnight deposit rate at 19.00 percent, the overnight lending rate at 20.00 percent, and the rate of the main operation and the discount rate at 19.50 percent, citing current inflation dynamics and the evolving outlook after annual headline and core inflation rose to 14.9 percent and 14.7 percent, respectively, in July 2026, while monthly measures were unchanged and output remained below potential. It expected inflation to accelerate through the third quarter of 2026 at a slower pace than projected in July before declining from the first quarter of 2027 toward the 7 percent target, plus or minus 2 percentage points, during the second half of 2027, while flagging regional hostilities and a higher-than-expected pass-through from fiscal consolidation measures as upside risks.
On September 24, the Committee again held the rates at those levels after annual headline inflation eased to 14.5 percent in August on lower food inflation, which offset increases in electricity tariffs and housing rents, while core inflation remained relatively stable at 14.9 percent and monthly headline inflation was 0.1 percent. With inflation more favorable than expected, the Central Bank of Egypt lowered its forecast and projected annual headline inflation to stabilize on average in the third quarter of 2026 before gradually converging toward the target during the second half of 2027, judging current policy restrictiveness sufficient to buffer upside risks from regional hostilities, fiscal consolidation measures and international food prices, particularly if global energy prices remain elevated.