Egypt's Central Bank Maintains Key Policy Rate

The Central Bank of Egypt kept its key interest rate unchanged at 19% at its August 2026 meeting, in line with market expectations. This marked the fifth consecutive meeting with rates on hold, extending a pause in the almost year-long monetary easing cycle as the Middle East conflict increased pressure on the Egyptian pound and fuel import costs. Headline inflation accelerated to 14.9% in July, after easing through June. Meanwhile, economic activity is estimated to moderated in the second quarter of 2026. The central bank is expected to keep rates unchanged through the end of 2026 before resuming its easing cycle in Q1 2027. Policymakers expect inflation to return to the 7% ±2% target range in the second half of 2027. Economic growth is expected to average 5% in FY 2025/26, with output remaining below potential, though expected to gradually converge toward potential by H2 2027. Looking ahead, policymakers reiterated their commitment to preserve price stability.

The Central Bank of Egypt kept its key interest rate unchanged at 19% at its July 2026 meeting, as expected, with policymakers cautious amid geopolitical tensions in the Middle East. This marks the third consecutive meeting in which the central bank leaves rates unchanged, pausing an almost year-long monetary easing cycle. Headline inflation slowed for a third consecutive month in June to 14.3%, slowing to the lowest level since before the conflict in the Middle East. Meanwhile, GDP growth slowed to 5% in the first quarter of 2026 from 5.3%, constrained by geopolitical tensions, uncertain trade policies, and weak global demand. Looking ahead, economic activity is expected to average 5% in fiscal year 2025/26, with output below full potential. Inflation is expected to accelerate through the third quarter of 2026, albeit at a slower pace than previously anticipated, supported by easing inflationary pressures, and reaching the target level of 7±2% during the second half of 2027.

The Central Bank of Egypt kept its key interest rate unchanged at 19% at its May 2026 policy meeting, matching market expectations. The decision followed a rise in annual headline inflation to 13.4% in February from 11.9% in January, while core inflation accelerated to 12.7% from 11.2%, driven by higher education costs and seasonal food price increases during Ramadan. The central bank warned that rising global energy and agricultural prices, exchange-rate volatility, and fiscal adjustment measures could slow the disinflation process and threaten its Q4 2026 inflation target. Meanwhile, Egypt lowered its FY2025/26 GDP growth forecast to 4.9% from 5.1%, citing weaker external demand and regional tensions. Globally, policymakers noted that escalating conflicts and supply-chain disruptions continue to pressure inflation and weaken growth prospects.