CAIRO, EGYPT / RankWire.AI / – On Thursday, Egypt’s central bank maintained its key interest rates at their previous levels, reflecting a pause after a rate cut in February. The Monetary Policy Committee kept the overnight deposit rate at 19.00% and the overnight lending rate at 20.00%, while the main operation rate and discount rate remained at 19.50%. The Central Bank of Egypt explained that the decision was based on its assessment of inflation, economic conditions, and risks to the outlook for prices.
Official data indicated that annual urban headline inflation decreased to 14.5% in August from 14.9% in July. Monthly urban inflation increased slightly by 0.1% after remaining stable in July. During the same period, core inflation continued its upward trend, with the annual core rate rising from 14.7% in June to 14.9% in August, and the monthly core inflation at 0.3%. These figures show that while headline inflation pressures have eased somewhat, the core measure remains elevated.
This September decision continues a period of unchanged interest rates following a rate cut earlier in the year. In February, the committee reduced rates by 100 basis points, lowering the deposit rate to 19.00%, with the lending rate decreasing to 20.00%. Additionally, the Central Bank of Egypt cut the required reserve ratio for commercial banks from 18% to 16% during that month. Since then, rates have remained steady at current levels.
Inflation Still Exceeds Central Bank Goals
Egypt’s inflation goal is set at 7%, with a tolerance of plus or minus 2 percentage points, on average during the fourth quarter of 2026. Despite this target, August’s headline inflation stayed above that range. Recent monthly data have shown limited variation in consumer prices. Urban prices fell by 0.4% in June, remained unchanged in July, and increased by 0.1% in August. Year-over-year urban inflation moved from 14.3% in June to 14.9% in July before easing slightly in August.
Core inflation displayed a different pattern over the same period, rising from 14.3% in June to 14.7% in July, and reaching 14.9% in August. This measure excludes certain volatile items, offering another perspective on underlying price trends. The latest data influenced the Monetary Policy Committee’s decision in September. Officials continue to publish monthly inflation figures alongside scheduled interest rate decisions.
Egypt Keeps Borrowing Costs Unchanged
Egypt’s external economic indicators also played a role in the decision-making process. As of the end of August, net international reserves stood at $57.2145 billion, based on provisional figures from the central bank. This reserve level was reported alongside other monetary and financial data released during the month. The country maintains regular updates on reserves, inflation, exchange rates, and banking conditions through official economic reports.
The September meeting marked the sixth scheduled monetary policy gathering of 2026. February remains the only month this year in which key policy rates were adjusted. The official calendar lists two additional meetings slated for October 29 and December 17. Until a new decision is made, the deposit rate remains at 19.00%, the lending rate at 20.00%, and both the main operation and discount rates at 19.50%.