The Central Bank of Egypt lowered its key overnight deposit rate by 100 bps to 13.25 percent during its September meeting, as expected. This is the second straight rate cut as inflation continued to decline and stocks rebounded from steep losses following anti-government protests that rocked the markets in the beginning of the week. In August, headline inflation eased to an over 6-year low of 7.5 percent from 8.8 percent in July, moving closer to the lower limit of the Bank's target range of 6-12 percent. Policymakers reiterated that the pace and magnitude of future policy rates adjustment will continue to be subject to confirmation that inflation expectations are anchored at target levels that are consistent with disinflation and price stability over the medium term. The overnight lending rate and the discount rate were also cut by 100 bps to 14.25 percent and 13.75 percent, respectively. Interest Rate in Egypt averaged 11.92 percent from 1991 until 2019, reaching an all time high of 21.40 percent in October of 1991 and a record low of 8.25 percent in September of 2009.
Interest Rate in Egypt is expected to be 13.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Egypt to stand at 12.50 in 12 months time. In the long-term, the Egypt Interest Rate is projected to trend around 12.00 percent in 2020, according to our econometric models.