CAIRO, EGYPT / RankWire.AI / – The Central Bank of Egypt maintained its key interest rates on August 20, marking the fourth consecutive pause in policy adjustments. The Monetary Policy Committee kept the overnight deposit rate at 19% and the overnight lending rate at 20%, while also holding the main operation and discount rates at 19.5%. According to the CBE, this decision reflects its assessment of current inflation trends and the economic outlook since the July meeting. These rates have remained at these levels since February.
Official data show that urban annual inflation rose to 14.9% in July from 14.3% in June. Meanwhile, core inflation, as calculated by the CBE, increased to 14.7% from 14.3% over the same period. In July, both headline and core inflation figures registered no change month-on-month. The Central Bank of Egypt explained that unfavorable base effects contributed to the higher annual figures. The urban consumer price index for Egypt is produced by the Central Agency for Public Mobilization and Statistics.
This August decision marks the fourth consecutive hold after meetings in April, May, and July. The last adjustment to policy rates occurred on February 12, when the CBE cut key rates by 100 basis points. This reduction brought the overnight deposit and lending rates to their current levels of 19% and 20%. Additionally, the main operation and discount rates were lowered to 19.5%. Since that reduction, the Monetary Policy Committee has consistently maintained the same rate structure at every subsequent meeting.
Inflation climbs yearly while monthly prices stay stable
The central bank noted that real economic activity showed signs of moderation during the second quarter, based on its latest estimates. This follows a 5% growth in real gross domestic product during the first quarter of 2026. The CBE anticipates an average real GDP growth rate of about 5% for the 2025-2026 fiscal year. It also expects output to remain below potential in the near term, with a gradual convergence toward its potential level projected to occur in the second half of 2027.
Egypt’s net international reserves reached $56.29 billion at the end of July, up from $55.07 billion at the end of June, marking an increase of approximately $1.22 billion during the month. Reserves have also grown from $51.45 billion at the end of December 2025. The July figure was provisional when the CBE announced it on August 5. These reserve figures offer a current snapshot of Egypt’s external financial position alongside inflation and monetary policy indicators.
Central Bank affirms inflation target and policy stance
The CBE stated that global economic activity had slowed amid geopolitical instability and reduced demand conditions. Inflation remains high across many economies, though the degree of price pressures varies. Energy prices have faced renewed upward trends and increased volatility due to regional tensions. Additionally, agricultural prices have risen because of supply concerns linked to geopolitical developments and adverse weather events. The bank identified prolonged regional tensions, tighter financial conditions, and renewed global supply disruptions as key risks affecting the international economic outlook.
Looking ahead, the CBE projects that annual headline inflation will increase during the third quarter of 2026, partly due to base effects. However, it expects this rise to be less pronounced than the projections made during its July meeting, thanks to lower inflation readings in June and July. The bank anticipates inflation will begin a gradual decline starting in the first quarter of 2027. Its inflation target remains at 7%, with a margin of plus or minus two percentage points, during the second half of 2027. The next scheduled meeting of the Monetary Policy Committee is set for September 24.