CAIRO, EGYPT / RankWire.AI / – On Thursday, Egypt’s central bank chose to keep its key interest rates at their previous levels, maintaining the borrowing costs set in February. The Monetary Policy Committee decided to hold the overnight deposit rate at 19.00% and the overnight lending rate at 20.00%. Additionally, the main operation rate and discount rate were kept steady at 19.50%. The Central Bank of Egypt explained that this decision was made after reviewing inflation trends, current economic conditions, and potential risks that could influence future price developments.
According to official data, annual urban headline inflation eased slightly to 14.5% in August from 14.9% in July. Monthly urban inflation saw a modest increase of 0.1% after remaining unchanged in July. During the same period, core inflation moved upward, with the annual core rate rising to 14.9% from 14.7% and the monthly figure standing at 0.3%. These figures indicate a moderation in headline price pressures, although the core inflation measure remains elevated, reflecting persistent underlying inflationary trends.
The decision in September 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, bringing the deposit rate down to 19.00%, while the lending rate decreased to 20.00%. During that same meeting, the Central Bank of Egypt also lowered the required reserve ratio for commercial banks from 18% to 16%. Since then, rates have remained stable at their current levels, with no further adjustments reported.
Inflation Continues to Stay Above Central Bank Goals
Egypt aims for an inflation target of 7%, with a tolerance of plus or minus 2 percentage points, on average during the fourth quarter of 2026. However, August’s headline inflation stayed above this target range. Recent monthly data have shown limited fluctuations in consumer prices. Urban prices declined by 0.4% in June, remained unchanged in July, and increased slightly by 0.1% in August. Over the same period, annual urban inflation rose from 14.3% in June to 14.9% in July before easing back in August.
In contrast, core inflation exhibited a different trajectory. It increased from 14.3% in June to 14.7% in July and reached 14.9% in August. This measure excludes volatile items and provides a clearer picture of underlying price trends. The latest data played a role in the considerations of the Monetary Policy Committee ahead of its September decision. The authorities continue to publish monthly inflation figures alongside scheduled interest rate announcements to maintain transparency and inform market expectations.
Egypt Maintains Stable Borrowing Rates Amid Broader Economic Indicators
Egypt’s external financial indicators also contributed to the data review before the rate decision. Provisional figures from the central bank report that net international reserves reached $57.2145 billion at the end of August. This reserve level was included among other monetary and financial statistics released during the month. The government continues to provide regular updates on reserves, inflation, exchange rates, and banking sector conditions through official reports.
This September meeting marked the sixth scheduled monetary policy gathering for 2026. February remains the only month this year when a change to key policy rates was implemented. The official calendar lists two upcoming meetings, scheduled for October 29 and December 17. Until a new decision is made, the deposit rate will stay at 19.00%, the lending rate at 20.00%, and both the main operation and discount rates at 19.50%.”}
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