Central Bank of Egypt Cuts Interest Rates by 2% as Inflation Slows

The Central Bank of Egypt (CBE) has resumed the easing of its monetary policy by reducing the benchmark deposit rate by 200 basis points to 22%, marking a 2% reduction in interest rates, according to an announcement by the Monetary Policy Committee. This follows inflation’s recent slowdown and the strengthening of the Egyptian pound, prompting the bank to continue unwinding its earlier tightening cycle.

Earlier this year, the CBE had already lowered rates by 225 basis points in April and 100 basis points in May, paused in July, and now reinstated cuts in August as inflation cooled further. Inflation eased to 13.9% in July from 14.9% in June, providing additional momentum for the bank to act. The improved inflation environment and a stronger local currency have created sufficient latitude for monetary easing without stoking price pressures.

This cut aims to support growth and private sector activity at a time when economic momentum is gaining ground. It also aligns with projections suggesting further downward movement in interest rates as economic conditions continue to improve.