CAIRO, EGYPT / RankWire.AI / – Egypt’s central bank has kept its main interest rates unchanged as of August 20, marking the fourth consecutive policy meeting with no adjustments to borrowing costs. The overnight deposit rate remains at 19%, with the overnight lending rate staying at 20%. Both the main operation rate and the discount rate are steady at 19.5%. Since its rate cut in February, the Central Bank of Egypt has maintained these levels.
The last rate change by the Monetary Policy Committee was on February 12, when it cut the policy corridor by 100 basis points. This move lowered the deposit rate to 19% and the lending rate to 20%, with the main operation and discount rates also decreasing to 19.5%. Since then, policymakers have held rates steady during meetings in April, May, July, and again in August.
Inflation figures played a key role in the latest policy review. Annual urban headline inflation rose to 14.9% in July from 14.3% in June, while annual core inflation increased to 14.7% from 14.3% over the same period. Despite these increases, both headline and core consumer prices showed no monthly growth in July. The central bank linked the annual uptick partly to unfavorable base effects.
Inflation climbs annually as monthly prices stabilize
Economic performance also influenced the decision. According to the central bank’s data, real gross domestic product expanded by 5% in the first quarter of 2026. The bank also noted that economic activity slowed during the second quarter. For the entire 2025-2026 fiscal year, it projects an average real GDP growth of around 5%. Additionally, the institution highlighted that current output remains below its potential in the short term.
Egypt’s foreign currency reserves continued their upward trend over the summer months. Net international reserves rose to $56.29 billion at the end of July, up from $55.07 billion in June, marking an increase of approximately $1.22 billion in just one month. Reserves also exceeded the $51.45 billion level recorded at the end of December 2025. The Central Bank of Egypt noted that the July reserve figure was provisional when it published the data.
Priority remains on curbing inflation
The central bank’s assessment continues to consider the global environment. Officials referenced slower economic activity worldwide, geopolitical uncertainties, and weaker demand conditions. They also pointed out that inflation remains high across many economies, with energy prices facing renewed upward pressure and agricultural prices rising due to supply concerns and challenging weather patterns. The Monetary Policy Committee highlighted tighter financial conditions and global supply disruptions as additional risks influencing the international outlook.
Looking ahead, the central bank anticipates that annual headline inflation will increase during the third quarter of 2026, mainly due to base effects. However, it expects this rise to be smaller than previously projected in July, following lower inflation readings in June and July. A gradual decline in inflation is forecasted to resume from the first quarter of 2027. The bank’s inflation target remains 7%, with a tolerance band of two percentage points, during the second half of 2027. The next policy meeting is scheduled for September 24.