US tariffs increase uncertainty as Egypt weighs interest rate cut

Aboul Naga made these remarks during his speech at the EFG Hermes One-on-One Conference in Dubai.

During the conference, he noted that the decision to lower interest rates will depend on the CBE’s confidence that inflation will not rise again and that the target rate of seven percent (± two percent) will be achieved by the last quarter of 2026.

Furthermore, Aboul Naga said this uncertainty would be one of the factors the CBE’s Monetary Policy Committee (MPC) will consider in its upcoming meeting on 17 April.

In that meeting, the CBE will review the key interest rates in light of the developments of the global and local economies, mainly the inflation rate trend.

In 2024, the CBE hiked the key interest rates by eight percent (800 bps), and inflation has maintained a downward path over the past four months.

The readings of March’s inflation rates are anticipated to be released this week.

Aboul Naga emphasized that the CBE aims to avoid any disruptive shifts in monetary policy if it decides on an early rate cut.

Meanwhile, investors are closely watching the upcoming meeting, as it could mark the first rate cut since Egypt’s tightening monetary policy began in March 2022.

Most experts predict that the CBE will begin reducing interest rates in April, following a significant drop in inflation rates in February.

However, Chair of the US Federal Reserve Jerome Powell insinuated that the newly applied tariffs are expected to drive global inflation higher after a few months of decline.