Egypt: Central Bank of Egypt leaves rates unchanged in November
Bank holds rates: At its meeting on 20 November, the Central Bank of Egypt (CBE) maintained its overnight deposit, overnight lending and main operations rates at 21.00%, 22.00% and 21.50%, respectively. Market analysts’ forecasts had been split between a hold and a reduction. The hold followed a total of 625 basis points of reductions in April–October.
Bank shifts to a wait-and-see approach: Headline and core inflation rose in October, leading the Bank to state that it needs time to assess if interest rates are sufficiently high to bring down inflation to its target before reducing them further.
Regarding the Bank’s forecasts, it expects inflation to rise in CY Q4 2025, before declining in CY H2 2026, in line with our Consensus.
Regarding economic activity, the Bank expects real GDP growth to have increased to 5.2% in July–September 2025, suggesting the economy is moving closer to full capacity utilization and dissuading a rate cut.
Final CY 2025 rate cut on the table for December meeting: The Central Bank did not provide explicit forward guidance on future interest rate movements. Our Consensus is for the Bank to cut rates at its final meeting of the current calendar year on 25 December. Next calendar year, our panelists see further reductions, albeit less aggressive ones than this year’s.