CAIRO, EGYPT / RankWire.AI / – The Central Bank of Egypt maintained its key interest rates on August 20, marking the fourth consecutive meeting where policies remained steady. The Monetary Policy Committee kept the overnight deposit rate at 19% and the overnight lending rate at 20%. Additionally, the main operation and discount rates stayed at 19.5%. The CBE indicated that this decision reflected its evaluation of current inflation trends and the economic outlook since its July session. Since February, these rates have persisted at these levels.
Official data show that the annual urban inflation rate increased to 14.9% in July from 14.3% in June. During the same period, the CBE’s calculated core inflation rose to 14.7% from 14.3%. On a monthly basis, both headline and core inflation remained unchanged in July. The Central Bank of Egypt attributed the higher annual readings to unfavorable base effects. The urban consumer price index for Egypt is compiled by the Central Agency for Public Mobilization and Statistics.
This August decision signifies the fourth hold since meetings in April, May, and July. The last adjustment to policy rates occurred on February 12, when the CBE reduced key rates by 100 basis points. This cut brought the overnight deposit and lending rates to their current levels of 19% and 20%, respectively. The main operation and discount rates also decreased to 19.5%. Since that February reduction, the Monetary Policy Committee has maintained the entire rate structure unchanged at each subsequent meeting.
Inflation Climbs Annually While Monthly Prices Stay Steady
The central bank noted that real economic activity continued to slow during the second quarter, according to its latest estimates. This slowdown followed a 5% growth in real gross domestic product during the first quarter of 2026. The CBE anticipates an average real GDP growth of around 5% throughout the fiscal year 2025-2026. It also expects output to stay below potential levels in the near term, with a gradual convergence expected during the latter half of 2027.
Egypt’s net international reserves reached $56.29 billion at the end of July, compared to $55.07 billion at the end of June, reflecting an increase of approximately $1.22 billion during that month. Reserves have also grown from $51.45 billion at the close of December 2025. The July figure was provisional at the time of the CBE’s release on August 5. These reserve levels, alongside inflation and monetary policy indicators, offer insight into Egypt’s current external financial health.
Maintaining Inflation Goals and Monetary Policy Strategy
The CBE stated that global economic activity had moderated amid geopolitical instability and decreased demand. While inflation remains high in many economies, the degree of price pressures varies across countries. Energy prices experienced renewed upward momentum and increased volatility due to regional tensions, while agricultural prices rose owing to supply concerns linked to geopolitical developments and adverse weather conditions. The bank identified prolonged regional tensions, tighter financial conditions, and renewed global supply disruptions as key risks to the international economic outlook.
The CBE forecasts that headline inflation will rise during the third quarter of 2026, partly driven by base effects. Nevertheless, the increase is expected to be less pronounced than projected during its July meeting, following lower inflation figures in June and July. The bank anticipates inflation will gradually decline starting from the first quarter of 2027. Its inflation target remains at 7%, with a permissible range of plus or minus two percentage points during the second half of 2027. The next scheduled interest rate decision by the Monetary Policy Committee is set for September 24.