The Central Bank of Egypt cuts key interest rates by 2.25% as inflation slows down

The Central Bank of Egypt cuts key interest rates by 2.25% as inflation slows down

The Central Bank of Egypt (CBE) lowered its main interest rates by 2.25% on Thursday. This is the first rate cut in nearly five years, as inflation decreases from its highest point.

CBE Monetary Policy Decision

The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided to lower the overnight deposit rate, overnight lending rate, and the main operations rate to 25%, 26%, and 25.5%, respectively.

The discount rate was also reduced by 2.25% to 25.5%, which is the first time it has been cut after seven months of holding the rates steady.

The CBE said that, considering inflation and the economy, the MPC believed cutting the rates by 2.25% would help keep inflation in check and maintain the expected decline in inflation.

The CBE added that while economic growth is mostly stable, global trade issues may hurt the economy due to problems with supply chains and weaker demand around the world.

The central bank raised interest rates by 8% in 2024, making the total increase 19% since March 2022 when the tightening cycle began. The last rate cut was in November 2020.

Inflation Overview

Egypt’s monthly inflation rate for urban areas was 1.6% in March, up from 1.4% in February and 1% in March last year, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

On an annual basis, inflation was 13.6% in March, slightly higher than the 12.8% in February. Inflation peaked at 38% in September 2023.

Core inflation, which excludes some items, was 0.9% in March, lower than 1.6% in February and 1.4% in March last year. The annual core inflation dropped to 9.4% from 10% in February.

What to Watch For

Egypt’s economy is expected to grow by 4.5% in the next fiscal year, up from an estimated 4% in 2024-25, according to Finance Minister Ahmed Kouchouk.

The country’s total GDP is predicted to reach $399 billion (EGP 20.4 trillion), up from $336.4 billion (EGP 17.2 trillion) in the current fiscal year, which runs from July to June.

Published: 18th April 2025

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