Will Central Bank of Egypt cut interest rates again amid economic shifts?
With inflation easing, the cost of living stabilizing, and economic indicators showing improvement, markets are increasingly anticipating the first major rate cut since May.
However, concerns over potential inflationary pressures, particularly with the looming fuel price hikes in October and the US tariffs that have shaken global markets, pose a challenge to the CBE’s next move.
With inflation slowing down and the annual inflation rate falling below 14 percent, along with a noticeable improvement in the exchange rate of the EGP and a relative calm in food and energy prices, expectations are growing that the Thursday meeting of the CBE’s Monetary Policy Committee (MPC) could see the first significant interest rate cut since May.
The CBE has introduced a total cut of 3.25 percent (325 bps) to the key interest rates since the beginning of 2025.
Current economic indicators suggest that the CBE may be in a comfortable position to resume monetary easing.
In March 2024, the CBE made a sharp decision to raise interest rates to 27.25 percent for deposits and 28.25 percent for lending in order to curb inflation.