Central Bank of Egypt decreases rates in December

CBE resumes loosening cycle: At its meeting on 25 December, the Central Bank of Egypt (CBE) decided to cut the overnight deposit, overnight lending and main operations rates by 100 basis points to 20.00%, 21.00% and 20.50%, respectively. The cut largely took market analysts by surprise, as another hold had been anticipated. The reduction brought total cuts to 725 basis points in April–December.

Headline inflation resumes downward trajectory: The key domestic factor was headline inflation resuming its downward trend in November, as food inflation eased to an over four-year low. The CBE noted these dynamics revealed an improvement in inflation expectations plus the fading impact of prior shocks. The Bank expects inflation to wane toward its 5.0–9.0% target by October–December 2026; that said, the slowdown will lose steam due to fiscal measures, while geopolitical tensions remain a key upside risk. Regarding activity, the CBE expects GDP growth to have moderated to around 5% in October–December 2025 from the prior three months’ 5.3% rise, providing additional impetus for an interest rate cut to boost economic activity.

More cuts in 2026: The CBE did not provide explicit forward guidance on future interest rate movements. All of our panelists expect the CBE to reduce rates further in 2026, with a 300–700 basis point spread. The CBE will reconvene on 12 February.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Egyptian interest rate projections for the next ten years from a panel of 12 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Egyptian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Egyptian interest rate projections.

Want to get access to the full dataset of Egyptian interest rate forecasts? Send an email to info@focus-economics.com.