On 29 October 2026, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided to raise the key policy rates by 100 basis points. The overnight deposit rate, the overnight lending rate and the rate of the main operation rose to 20.0%, 21.0% and 20.5% respectively, and the discount rate was raised to 20.5%. The CBE states that the decision comes amid challenging external conditions and elevated uncertainty, and aims to keep expectations anchored and safeguard the disinflation trajectory.
Domestically, the CBE nowcast suggests that real GDP growth will remain broadly stable in the third quarter of 2026, close to the 4.7% rate recorded in the second quarter. Output remains below potential and is expected to converge toward full capacity by the second half of 2027, so demand-driven inflationary pressures should remain limited in the short term.
Monthly headline and core inflation accelerated in September 2026 to 1.3% and 0.8% respectively. Annual headline and core inflation eased to 13.9% and 14.1% respectively in September 2026.
The MPC describes the decision as preemptive, aimed at preserving the projected disinflation path and achieving the CBE's inflation target of 7% (± 2 percentage points) on average in the fourth quarter of 2027. It points to risks from the regional conflict and its spillovers to global energy and other commodity prices, tighter global financial conditions, and a higher-than-expected pass-through of domestic fiscal consolidation measures. The Committee will continue to evaluate its stance based on evolving economic conditions, the forecasted inflation trajectory and the prevailing balance of risks.
Source: Central Bank of Egypt (CBE)