Egypt’s Central Bank Cuts Interest Rates as Inflation Slows and Economy Grows

Egypt’s Central Bank Cuts Interest Rates as Inflation Slows and Economy Grows

Egypt’s central bank has reduced key interest rates by 200 basis points, as inflation slows and the economy shows signs of stronger growth. The move was made possible by better economic data, though the bank said it will keep watching inflation closely.

Interest rates reduced

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) lowered rates as follows:

• Overnight deposit rate: 22%

• Lending rate: 23%

• Main operation rate: 22.5%

• Discount rate: 22.5%

The MPC said it will decide on further changes at each meeting, depending on forecasts and risks.

Inflation slows down

Egypt’s annual inflation rate fell to 13.9% in July from 14.9% in June. Core inflation stayed stable at 11.6%, mainly due to cheaper food and drinks.

Month-on-month, inflation dropped by 0.5% in July, showing a clear downward trend. Food and drinks fell 3.1%, with vegetables down 15.4% and meat and poultry down 1.3%, while cereals and bread rose 4.3%.

However, other costs increased sharply:

• Healthcare: +37.7%

• Transport and communication: +34.8%

• Telecommunications: +11.2%

Egypt is still recovering from record inflation of 38% in September 2023.

Stronger growth

The International Monetary Fund (IMF) raised its growth forecast for Egypt, now expecting the economy to expand 3.8% in 2025 and 4.3% in 2026.

In the second quarter of this fiscal year, Egypt grew 4.3%, the fastest pace in over two years, led by manufacturing and tourism. This came despite lower Suez Canal revenues caused by trade problems in the Red Sea.

Looking ahead

The central bank expects inflation to keep falling, averaging 14–15% in 2025, and moving closer to its target of 7% by late 2026 and 5% by 2028, supported by better price trends and stronger economic fundamentals.

Published: 29th August 2025

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