Is Central Bank of Egypt poised for fresh rate cut on Thursday?

The previous MPC meeting ended with rates held at 24 percent for deposits and 25 percent for lending.

The market awaits the MPC decision, which is determined in light of global and local macroeconomic developments, primarily focusing on inflation rate trends.

Aya Zohairy, the deputy head of Macroeconomic Research at Zilla Capital, told Ahram Online that the decision to hold rates, taken in the last meeting in May, was shaped by a complex mix of domestic and international factors.

These include persistent high inflation levels, relative stability in the Egyptian pound’s exchange rate, and Egypt’s need to maintain short-term foreign inflows, also known as “hot money.”

According to Zohairy, both core and headline inflation remain above the CBE’s official targets, despite some recent declines.

She warned that any further rate cuts under current inflationary pressures could undermine efforts to curb price growth, especially amid continued global food price volatility and geopolitical tensions in the Middle East that threaten supply chains.