Central Bank of Egypt Keeps Key Policy Rates Unchanged

The Monetary Policy Committee of the Central Bank of Egypt kept its key policy rates unchanged, leaving the overnight deposit rate at 19.00%, the overnight lending rate at 20.00%, the main operation rate at 19.50% and the discount rate at 19.50%, saying the decision reflected current inflation dynamics and the evolving outlook and would maintain an adequately positive real interest margin on average over the forecast horizon, supported by better-than-expected macroeconomic developments since the previous meeting. Domestically, real GDP growth moderated to 5.0% in Q1 2026 and the nowcast for Q2 2026 points to a mild deceleration due to the adverse impact of regional conflict, while the Central Bank of Egypt projects growth of around 5.0% in FY 2025/26, with output below potential and limited short-term demand-driven inflation pressures. Annual headline inflation eased to 14.3% in June 2026 and monthly headline inflation fell to -0.4%, while annual core inflation edged up to 14.3% on an unfavorable base effect even as monthly core inflation slowed to 0.3%. The central bank said favorable exchange-rate developments and a broad-based decline in inflationary pressures should help moderate the expected acceleration in headline inflation through Q3 2026, after which inflation is projected to gradually decline to single digits in line with the 7% target, plus or minus 2 percentage points, in H2 2027. Globally, it cited slower growth, persistent trade policy uncertainty, geopolitical