The Central Bank of Egypt’s Monetary Policy Committee raised key policy rates by 100 basis points, taking the overnight deposit rate to 20.0%, the overnight lending rate to 21.0% and the main operation and discount rates to 20.5%, to anchor inflation expectations and safeguard disinflation amid mounting external risks. The move followed 100-basis-point cuts in December 2025 and February 2026 that lowered the deposit rate to 19%, followed by holds through September. Annual headline inflation eased to 13.9% in September 2026, although monthly headline and core inflation accelerated. The central bank said tighter policy would support convergence toward its inflation target of 7%, plus or minus 2 percentage points, on average in Q4 2027. Its nowcast points to broadly stable real gross domestic product growth in Q3 2026, near the 4.7% recorded in the preceding quarter, with below-potential output expected to limit near-term demand-driven inflation pressures. Globally, activity remained resilient, but regional tensions and supply disruptions pushed energy and agricultural prices higher, while tighter financial conditions and trade disruptions clouded the outlook. The committee also highlighted the risk of higher-than-expected pass-through from domestic fiscal consolidation and said it would reassess its stance against evolving economic conditions, the inflation trajectory and the balance of risks, adjusting policy as necessary.
Central Bank of Egypt Raises Key Policy Rates by 100 Basis Points
The Central Bank of Egypt’s Monetary Policy Committee raised key policy rates by 100 basis points, taking the overnight deposit rate to 20.0%, the overnight lending rate to 21.0% and the main operation and discount rates to 20.5%. The move aims to anchor inflation expectations amid mounting external risks and support convergence towards its inflation target of 7%, plus or minus 2 percentage points, on average in the fourth quarter of 2027.