CAIRO, EGYPT / RankWire.AI / – The Central Bank of Egypt announced on August 20 that it would keep its main interest rates steady, marking the fourth consecutive meeting where no changes were made to monetary policy. The Monetary Policy Committee held the overnight deposit rate at 19%, the overnight lending rate at 20%, and maintained the main operation and discount rates at 19.5%. The bank stated that this decision was based on its assessment of current inflation trends and the economic outlook since the July meeting. These rates have been unchanged since February.
Official data show that the annual urban inflation rate increased to 14.9% in July from 14.3% in June. According to the CBE’s calculation, core inflation rose to 14.7% from 14.3% during the same period. In July, both headline and core inflation showed no monthly change. The Central Bank of Egypt explained that adverse base effects contributed to the higher annual inflation figures. The urban consumer price index is compiled by the Central Agency for Public Mobilization and Statistics.
This August hold signifies the fourth consecutive pause following meetings in April, May, and July. The last time the CBE adjusted its rates was on February 12, when it reduced the key rates by 100 basis points, bringing the overnight deposit and lending rates to 19% and 20%, respectively. The main operation and discount rates also declined to 19.5%. Since then, the Monetary Policy Committee has kept the entire rate structure unchanged at each meeting.
Inflation climbs yearly while monthly price stability persists
The central bank noted that real economic activity continued to slow 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 projects an average real GDP growth of about 5% for the 2025-2026 fiscal year. It also anticipates that output will remain below its potential in the near term, with a gradual convergence toward potential levels expected during the second half of 2027.
Egypt’s net international reserves reached $56.29 billion by the end of July, up from $55.07 billion at the close of June, representing a monthly increase of approximately $1.22 billion. Reserves have also risen from $51.45 billion at the end of December 2025. The July figure was provisional when the CBE released it on August 5. These reserve figures serve as an important indicator of Egypt’s external financial health, alongside inflation and monetary policy measures.
Bank confirms inflation goal and policy stance
The CBE highlighted that global economic activity had moderated amid ongoing geopolitical tensions and softer demand conditions. It also pointed out that inflation remains high in many economies, although the degree of price pressures varies. Energy prices faced renewed upward momentum and increased volatility due to regional tensions, while agricultural prices climbed because of supply concerns linked to geopolitical developments and adverse weather conditions. The bank identified prolonged regional conflicts, tighter financial conditions, and renewed global supply disruptions as key risks to the international economic outlook.
The CBE forecasts that headline inflation will rise during the third quarter of 2026, partly driven by base effects. It expects the increase to be less severe than initially projected in July, following lower inflation rates observed in June and July. The bank anticipates inflation will begin a gradual decline starting in the first quarter of 2027. Its inflation target remains 7%, with a margin of plus or minus two percentage points, during the second half of 2027. The next scheduled interest rate decision by the Monetary Policy Committee is set for September 24.