The Central Bank of Egypt’s Monetary Policy Committee held its key interest rates unchanged, judging the current degree of monetary restriction sufficient to support disinflation while containing renewed upside risks. The overnight deposit and lending rates remain at 19% and 20%, respectively, while the main operation rate and credit and discount rate stay at 19.5%. Headline inflation eased to 14.5% in August 2026, while core inflation was broadly stable at 14.9%. More favorable price developments prompted the central bank to lower its inflation forecast from the outlook at its August meeting. Headline inflation is expected to stabilize in the third quarter of 2026 and then decline gradually to the 7% target, within a range of plus or minus 2 percentage points, during the second half of 2027. Risks remain tilted upward because regional hostilities could increase global food and energy prices and amplify the inflationary impact of fiscal consolidation measures. Real gross domestic product growth slowed to 4.7% in the second quarter of 2026 from 5% in the first quarter, largely reflecting regional tensions. Growth averaged 5.1% in fiscal 2025/2026 and is expected to remain broadly around that level in fiscal 2026/2027, while spare capacity should keep demand-driven inflation pressures limited in the near term.
2026-09-24Central Bank of Egypt
Central Bank of Egypt holds policy rates at 19% to 20%, lowers inflation forecast
The Central Bank of Egypt held its overnight deposit and lending rates at 19% and 20%, with other key rates unchanged at 19.5%. It lowered its inflation forecast after headline inflation eased to 14.5% in August, but retained a restrictive stance as regional tensions, fiscal measures and global commodity prices pose upside risks.