CBE keeps interest rates unchanged
Updated 7/10/2025 10:48:00 PM
Arab Finance: The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) has decided to hold key interest rates steady, citing ongoing global uncertainties and recent domestic inflation trends, as per an announcement on July 10th.
The overnight deposit rate remains at 24%, the overnight lending rate at 25%, and the rate of the main operation at 24.5%.
The discount rate also stays unchanged at 24.5%.
According to the MPC, the decision reflects its assessment of the latest economic conditions since the previous meeting.
Globally, growth forecasts have been revised down since the start of the year due to uncertainty in trade policies and rising geopolitical tensions. In response, central banks in both advanced and emerging economies have maintained a cautious approach to monetary policy.
Oil prices have shown volatility, mainly due to supply factors and expectations of weaker demand. Agricultural commodity prices have declined slightly, supported by seasonal factors. However, inflation risks remain, driven by geopolitical developments, trade disruptions, and climate-related shocks.
Domestically, the CBE’s nowcast for the second quarter (Q2) of 2025 indicates that economic activity is recovering, with annual growth expected to remain close to the 4.8% recorded in Q1 2025, compared to 2.4% in Q2 2024.
The output gap is narrowing and is expected to close by the end of the current fiscal year (FY) 2025/2026, with demand-side inflationary pressures remaining limited under the current monetary stance.
Furthermore, the CBE expects annual headline inflation to remain near current levels during the rest of 2025 before declining in 2026, depending on the persistence of non-food inflation and the impact of fiscal measures, including changes in administered prices.
Given these factors, the MPC sees it as appropriate to keep rates at current levels while monitoring the potential effects of recent legislative changes such as value-added tax reforms.
The committee said it will continue to assess the pace and scale of future policy adjustments based on economic data and risk developments. It reaffirmed its commitment to its price stability target of 7% (± 2 percentage points), on average, in Q4 2026.
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