Egypt’s Central Bank Holds Interest Rates Amid Renewed Inflation Pressures and Stronger Growth Momentum

The Central Bank of Egypt (CBE) left its key interest rates unchanged at its Monetary Policy Committee meeting on November 20, 2025, pausing its aggressive easing cycle after four consecutive cuts totaling 525 basis points earlier this year. The decision reflects mounting inflation risks and a more cautious stance toward further monetary loosening.

The CBE held the:

• Overnight Deposit Rate at 21.00%
• Overnight Lending Rate at 22.00%
• Main Operation Rate at 21.50%
• Credit & Discount Rate at 21.50%

The pause comes after Egypt’s annual headline inflation unexpectedly climbed to 12.5% in October, up from 11.7% in September, while core inflation rose to 12.1%, driven by non-food price pressures - particularly in services. The central bank warned of a temporary inflation spike in late Q4 due to energy adjustments before easing toward its 5–9% target range in the second half of 2026.

On the growth front, real GDP expanded 5.2% in Q3 2025, slightly above the 5.0% recorded in Q2, supported by strong performance in non-petroleum manufacturing, trade, and tourism. The CBE noted that the economy is approaching full capacity utilization by the end of FY 2025/26, reinforcing the need for a “wait-and-see” approach amid global uncertainties, including commodity market volatility and persistent supply chain risks.

Market reaction was mixed. Some Wall Street analysts had anticipated a further 50-basis-point cut to bolster economic recovery, while others endorsed the rate hold as a prudent response to inflation signals. The Egyptian pound has appreciated 8% against the U.S. dollar so far this year, helping attract renewed portfolio inflows. Equities also reacted positively - the EGX 30 index edged up 0.30% to close at 40,633 points following the announcement.