Egypt’s Central Bank on has slashed key interest rates by 100 basis points, as authorities signal a continued push to support economic growth amid easing inflation.
The Monetary Policy Committee (MPC) lowered the overnight deposit rate to 20.0 percent, the overnight lending rate to 21.0 percent, and the main operation rate to 20.5 percent. The discount rate was also reduced to 20.5 percent.
The move reflects the MPC’s updated assessment of inflation trends and currency market performance, following earlier cuts during 2025 that together totalled 725 basis points. Previous reductions included 2.25 percent in April, 1 percent in May, 2 percent in August, 1 percent in October, and 1 percent in December, underscoring the bank’s strategy to foster financial stability while stimulating growth.
“The decision is in line with the CBE’s ongoing monetary policy framework, balancing price stability with the need to support economic expansion,” the central bank said.
Egypt’s economy has been benefiting from strong export performance in key sectors, including engineering and manufacturing, as well as improving foreign exchange reserves. Analysts say the latest rate cut is likely to encourage borrowing, investment, and domestic consumption, helping maintain momentum in economic recovery.
The MPC will continue to monitor inflation, currency fluctuations, and other macroeconomic indicators to adjust policy as needed, ensuring a stable environment for businesses and households.
Central Bank of Egypt’s MPC decisions in 2025
In 2025, the Central Bank of Egypt (CBE) pursued a sustained easing cycle, lowering key policy rates by a cumulative 725 basis points as part of an accommodative monetary stance aimed at supporting economic growth, encouraging investment, and anchoring inflation expectations.
The year’s easing began in April, when the CBE made its first significant cut, reducing key rates by 225 basis points (2.25 percentage points). This initial move responded to signs that inflation pressures were moderating following earlier tight monetary conditions and improvements in supply‑side factors.
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In May, the CBE followed up with a further 100‑basis‑point reduction, signaling confidence that inflation — though still above the central bank’s target range — was on a downward trajectory and that risks to price stability had eased sufficiently to permit accommodation.
The next substantial adjustment came in August, when the CBE delivered its largest single cut of the year, trimming rates by 200 basis points (2 percentage points). This move was widely interpreted by local economists as a bid to reinforce growth momentum ahead of a traditionally slower economic season, while reflecting continued improvements in core inflation and foreign exchange market stability.
In October, the bank again reduced rates by 100 basis points, reinforcing its policy shift even as global economic uncertainties and commodity price volatility persisted. The October cut was followed by another 100‑basis‑point reduction in early December, bringing total easing to 725 basis points well before the final rate action on December 25, when the MPC cut rates by an additional 100 basis points, bringing key benchmarks to their current levels.
Throughout the year, the CBE balanced its accommodative stance with a careful eye on inflation data, exchange rate developments and external pressures. The central bank’s governor repeatedly emphasised that decisions would remain data‑driven and flexible, ensuring that easing did not undermine macroeconomic stability.
Analysts say the series of cuts has helped lower borrowing costs for businesses and households and bolstered credit demand, though they note that real interest rates remain positive given ongoing disinflation. The moves also form part of broader efforts to support Egypt’s post‑pandemic economic recovery, promote private sector activity, and strengthen investor confidence.
The CBE’s policy shifts in 2025 came against a backdrop of modest inflation moderation, improvements in foreign exchange liquidity partly supported by strong export performance in sectors such as engineering and manufacturing and continued reforms aimed at enhancing financial sector resilience.
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Going into 2026, the central bank has indicated that it will continue to monitor global and domestic conditions closely, balancing growth support with its mandate to maintain price and financial stability.
