Cairo, Egypt – The Monetary Policy Committee of the Central Bank of Egypt decided on Thursday to maintain key policy rates, keeping the overnight deposit rate at 19.0 percent, the overnight lending rate at 20.0 percent, and the main operation rate at 19.5 percent.
Okay News reports that the decision reflects a cautious approach to managing inflation while supporting economic growth. Annual headline inflation increased to 13.4 percent in February 2026 from 11.9 percent in January, while core inflation rose to 12.7 percent from 11.2 percent, driven by seasonal increases in education fees and fluctuating food prices during Ramadan.
The central bank noted that its medium-term inflation target of 7 percent (±2 percentage points) for the fourth quarter of 2026 could face upward risks, particularly if regional conflicts persist or if fiscal consolidation measures pass through faster than expected.
The CBE has been gradually easing monetary policy since early 2025, cutting key interest rates by 825 basis points. Despite this easing, rates remain historically high, reflecting the bank’s careful balancing act between sustaining growth and controlling inflation.
Economic growth has been impacted by regional instability and other external pressures. In February, the CBE revised down its GDP growth forecast for the fiscal year ending June 2026 to 4.9 percent, compared with 5.1 percent previously.
Non-petroleum manufacturing, trade, and communications drove positive growth in the fourth quarter of 2025. Real GDP growth is projected to slow to 4.8 to 5.0 percent in the first quarter of 2026, down from 5.3 percent in the previous quarter.
Several African countries have also either held policy rates or reduced them in recent months. South Africa’s central bank kept its policy rate unchanged at 6.75 percent, while Nigeria’s central bank reduced its Monetary Policy Rate by 50 basis points to 26.5 percent in February 2026.
This monetary policy decision highlights the challenges facing emerging economies as they navigate inflation pressures amid regional instability.
