Egypt Holds Rates, Pauses Cuts Amid Inflation

Egypt’s central bank has kept its key rates unchanged for multiple meetings, with the overnight deposit rate at 19%, the overnight lending rate at 20%, and the main operation rate around 19.5% in recent sessions, reflecting a cautious stance as inflation remains elevated. Despite an easing trend in inflation over time, headline figures remain in the mid-teens, underlining ongoing pressures from energy costs, import bills, and regional uncertainty that complicate the external position. The MPC has signaled it will maintain high rates for now to anchor inflation expectations while monitoring evolving price dynamics, exchange-rate movements, and global commodity developments. The central bank’s outlook still targets inflation returning toward about 7% (±2 percentage points) by the second half of 2027, with future cuts dependent on clearer evidence of sustained price declines. This approach aims to support the pound and stability for government financing, even as private credit and investment face continued headwinds from tight monetary conditions.