The Central Bank of Egypt (CBE) on Thursday cut its key interest rates by 255 basis points. The lending rate now stands at 26 percent while the deposit rate has been reduced to 25 percent. This marks the second major cut in recent months, signaling the central bank’s confidence in Egypt’s disinflation trajectory.
According to the CBE, the rate cut “aligns with upholding the appropriate monetary stance” and is aimed at anchoring inflation expectations while maintaining the country’s projected path of disinflation. The central bank reaffirmed its commitment to achieving its inflation target of 7 percent ± 2 percentage points by the fourth quarter of 2026.
The move comes amid growing global economic uncertainty and shifting monetary policies across advanced and emerging markets. The CBE acknowledged these concerns, noting that many central banks are adopting a cautious stance due to ambiguous growth prospects and inflation dynamics.
Global trade disruptions and weakening demand also weigh heavily on the economic outlook, the CBE noted. It warned that recent global trade developments, including supply chain issues, could further challenge recovery efforts.
Despite these headwinds, Egypt’s central bank emphasized its readiness to act decisively using all available monetary tools. This latest rate cut reflects the bank’s strategic balancing act stimulating economic growth while steering inflation downwards following a period of surging prices.
Egypt’s inflation rate, which soared into double digits last year, has recently shown signs of easing. The rate cuts are expected to support borrowing, investment, and economic activity, but policymakers remain vigilant as external pressures persist.
The central bank’s proactive approach underscores its intent to ensure economic stability while navigating a turbulent global environment.
