- Decision
- Maintain
- Rate change
- 0 bps
- overnight deposit rate
- 19%
The Central Bank of Egypt’s Monetary Policy Committee left its overnight deposit rate at 19.0 %, lending rate at 20.0 %, main operation rate at 19.5 % and discount rate at 19.5 % on 2 April 2026, citing a renewed upswing in inflation and a more uncertain global and regional backdrop even as domestic growth momentum eases. The pause follows February’s 100 bp cut that brought the deposit rate to its present level. No changes were made to the corridor or other liquidity settings, preserving what the Committee calls an appropriately tight stance and a “positive real interest margin.” Headline inflation re-accelerated to 13.4 % y/y in February from 11.9 % in January, while core inflation rose to 12.7 %, against a downwardly revised real-GDP growth forecast of 4.9 % for FY 2025/26 after output slowed to around 4.8–5.0 % in Q1 2026 from 5.3 % in Q4 2025. The Committee noted that exchange-rate depreciation is acting as a key shock absorber in the face of higher global energy and food prices and related external pressures. It warned that the regional conflict, energy shocks and risk-off global sentiment have tilted risks to the upside for achieving the 7 % ± 2 pp inflation target in Q4 2026 and pledged to remain data-driven and ready to adjust policy to safeguard price stability.
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.