The Monetary Policy Committee (MPC) of the Central Bank of Egypt on Thursday decided to maintain key policy rates, signaling a cautious approach to managing inflation while supporting economic growth.
The overnight deposit rate remains at 19.0%, the overnight lending rate at 20.0%, and the main operation rate at 19.5%.
The discount rate was also held at 19.5%.
In its statement, the central bank emphasized that the decision reflects careful consideration of current inflation trends and the evolving macroeconomic outlook since the last MPC meeting.
What the Egypt central bank is saying
The CBE’s decision comes amid rising inflation and a slightly weakened growth outlook.
“The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) today decided to keep the key policy rates unchanged. The overnight deposit rate, overnight lending rate, and the rate of the main operation remain at 19.0 percent, 20.0 percent, and 19.5 percent, respectively,” the apex bank stated.
- Annual headline inflation increased to 13.4% in February 2026 from 11.9% in January.
- Core inflation rose to 12.7% from 11.2%, driven by seasonal increases in education fees and fluctuating food prices during Ramadan.
- Other food categories showed relative stability, indicating mixed inflationary pressures across the economy.
The central bank noted that its medium-term inflation target of 7% (±2 percentage points) for Q4 2026 could face upward risks, particularly if regional conflicts persist or if fiscal consolidation measures pass through faster than expected.
Get up to speed
The CBE has been gradually easing monetary policy since early 2025, cutting key interest rates by 825 basis points. Despite this easing, rates remain historically high, reflecting the bank’s careful balancing act between sustaining growth and controlling inflation.
Economic growth has been impacted by regional instability and other external pressures. In February, the CBE revised down its GDP growth forecast for the fiscal year ending June 2026 to 4.9%, compared with 5.1% previously.
More Insights
Domestic activity remains moderately robust, supported by key sectors:
- Non-petroleum manufacturing, trade, and communications drove positive growth in Q4 2025.
- Real GDP growth is projected to slow to 4.8–5.0% in Q1 2026, down from 5.3% in Q4 2025.
- Output is expected to remain below potential for longer than anticipated, which may keep short-term demand-side inflation pressures subdued.
The central bank reiterated that sustained regional conflicts could amplify inflation risks and influence the effectiveness of fiscal consolidation.
What you should know
Several African countries have also either held policy rates or reduced them in recent months.
Recently, South Africa’s central bank kept its policy rate unchanged at 6.75%, citing caution as rising energy prices linked to the U.S.-Israel conflict with Iran are expected to push inflation higher.
The Central Bank of Nigeria (CBN) reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5 per cent from 27 per cent at its recent meeting in February 2026.
