The Egyptian Central Bank keeps interest rates unchanged for the third time in 2026.
It emphasizes the continuation of the cautious monetary policy to combat inflation.
Written by Ziad Abdel Fattah:
The Monetary Policy Committee of the Central Bank of Egypt decided, in its meeting held today, Thursday, to keep the key interest rates unchanged, continuing its cautious approach to monetary policy management, in light of continued inflationary pressures and the uncertainty in the global and regional economy.
19% for deposits and 20% for loans
Under the decision, the central bank set the overnight deposit rate at 19% and the overnight lending rate at 20%, while the central bank’s main operation rate remained at 19.5%, It also kept the credit and discount rates at 19.5%.
The Central Bank explained, in a statement by the Monetary Policy Committee, that the decision to keep interest rates unchanged came after assessing the latest inflation developments and expectations, taking into consideration the continued uncertainty on the global stage, in light of geopolitical tensions, weak global demand, and fluctuations in energy and commodity prices.
The statement indicated that the global economy continued to grow at a limited pace, while recent inflationary pressures pushed many central banks to adopt more cautious monetary policies, at a time when oil and natural gas prices witnessed remarkable increases as a result of global supply disruptions, in addition to the rise in agricultural commodity prices due to increased production costs.
Slight slowdown in local growth
On the domestic front, the Central Bank reported that real GDP growth slowed to 5% during the first quarter of 2026, compared to 5.3% in the fourth quarter of 2025, with the slowdown expected to continue during the second quarter of this year as a result of the repercussions of regional tensions.
The Central Bank projected that the Egyptian economy would grow by approximately 5% during the 2025/2026 fiscal year, noting that the economy is still operating below its full potential, which limits demand-driven inflationary pressures in the short term.
The report also showed an improvement in the labor market, with the unemployment rate falling to 6% during the first quarter of 2026, compared with 6.2% in the previous quarter.
Inflation is falling... but pressures continue
The Central Bank stated that the annual headline inflation rate fell to 14.9% in April 2026, compared to 15.2% in March, while the core inflation rate fell to 13.8%, compared to 14% the previous month.
The Central Bank attributed this decline to a slowdown in the pace of food price inflation, while non-food prices remained stable. It emphasized that the impact of the energy price adjustments made last March was temporary and did not lead to widespread inflationary pressures.
Inflation expected to rise before falling
Despite the recent decline, the Central Bank expects inflation to rise again until the third quarter of 2026, influenced by base effect factors, in addition to the repercussions of the regional conflict, exchange rate movements, and fiscal consolidation measures.
He noted that the inflation rate will remain above the target level of 7% ±2% during the fourth quarter of 2026, before beginning to decline gradually starting in the first quarter of 2027, approaching the target during the second half of that year.
The Central Bank affirmed that this path relies on the continuation of the restrictive monetary policy, anchoring inflation expectations, and commitment to exchange rate flexibility, while continuing to monitor economic developments and surrounding risks, foremost among them the potential for continued geopolitical tensions and their impact on prices and supply chains.
The Monetary Policy Committee stressed that it will continue to continuously assess economic data and take necessary decisions to ensure inflation returns to its targets, maintain price stability, and support sustainable economic growth.
The Central Bank of Egypt decided, during its Monetary Policy Committee meeting held today, Thursday, to keep key interest rates unchanged for the third consecutive time. This move reflects its continued cautious approach to confronting inflationary pressures and both local and global economic challenges.
