URGENT: Egypt’s central bank cuts key rates by 200 bps

Egypt’s central bank on Thursday slashed its key interest rates by 200 basis points, citing an improved growth outlook and contained inflationary pressures.

The Monetary Policy Committee (MPC) lowered the overnight deposit rate to 22.00 per cent, the overnight lending rate to 23.00 per cent, and the main operation and discount rates to 22.50 per cent, the Central Bank of Egypt (CBE) said in a statement.

The bank said its latest projections point to a stronger-than-expected 5.4 per cent expansion in the second quarter of 2025, up from 2.4 per cent in the previous fiscal year, supported by non-petroleum manufacturing and tourism. Inflation is expected to remain on a disinflationary path in the short term, it added.

“Domestically, the CBE nowcast for Q2 2025 signals a faster growth outturn than previously
expected, driven by the positive contributions of non-petroleum manufacturing and tourism.” MPC statement read.
The central bank’s projections suggest that “real economic activity has expanded by 5.4 percent in Q2 2025, averaging 4.5 percent in FY 2024/25, compared to 2.4 percent in FY 2023/24.”

Unemployment fell to 6.1 per cent in the second quarter from 6.3 per cent in the first quarter.

Globally, the bank noted signs of recovery in growth and broadly stable inflation expectations, while warning that geopolitical tensions and trade disruptions still pose risks.

Attribution: Amwal Al Ghad English