Egypt’s central bank cuts key interest rates by 100 bps amid slowing inflation

The Central Bank of Egypt (CBE) has announced a 100-basis-point reduction in its key policy interest rates, citing moderating inflationary pressures and evolving domestic and global economic conditions.

 

Following its latest Monetary Policy Committee meeting, the CBE lowered the overnight deposit rate to 19 percent and the overnight lending rate to 20 percent. The main operation rate was cut to 19.5 percent, while the discount rate was also reduced to 19.5 percent.

 

In a move aimed at enhancing liquidity in the banking sector and stimulating credit activity, the CBE’s Board of Directors additionally reduced the required reserve ratio for commercial banks from 18 percent to 16 percent.

 

The decision comes on the back of newly released inflation data pointing to a gradual slowdown in price growth. According to the central bank, annual core inflation eased to 11.2% in January 2026, down from 11.8 percent in December. On a monthly basis, core consumer prices rose by 1.2 percent in January, compared with a 0.2 percent increase the previous month.

 

Data from the Central Agency for Public Mobilization and Statistics (CAPMAS) also showed improving trends. Annual urban inflation declined to 11.9 percent in January from 12.3 percent in December, while nationwide annual inflation fell to 10.1 percent from 10.3 percent.