Egypt: Central Bank of Egypt decreases rates in February
CBE brings rates to an over two-year low: At its meeting on 12 February, the Central Bank of Egypt (CBE) decided to cut key policy rates by 100 basis points, reducing the overnight deposit, overnight lending and main operations rates to 19.00%, 20.00% and 19.50%, respectively. The reduction brought total cuts to 825 basis points since April 2025, taking policy rates to the lowest level since mid-2023. Moreover, the Bank lowered the required reserve ratio for commercial banks from 18.00% to 16.00%, intensifying efforts to boost business lending and accelerate the country’s economic rebound.
Disinflation prompts rate cuts: Falling headline and core inflation were key factors influencing the CBE’s decision, with declining inflation driven by easing price pressures for food, exchange rate appreciation and subdued demand. Moreover, the CBE expects GDP growth to have moderated to around 4.9% in Q4 2025 compared to 5.3% in the previous quarter, further supporting the case for an interest rate cut to stimulate economic activity.
Further reductions expected this year: The CBE gave no explicit guidance on future rate moves, but all our panelists expect the Bank to reduce rates further by year-end, with a 200–600 basis point spread. The CBE will reconvene on 2 April.