Central Bank of Egypt holds rates in April

CBE pauses easing cycle: At its meeting on 2 April, the Central Bank of Egypt (CBE) decided to keep its key policy rates unchanged, with the overnight deposit rate remaining at 19.00%. This followed 825 basis points of cuts from April 2025 to February 2026.

Upside inflation risks prompt hold: The Bank’s decision was influenced by the rise in inflation since the start of the year, plus the likelihood that the Iran war will push up domestic inflation going forward. The impact of the war on inflation will be partly felt through the surge in global energy prices, plus recent currency depreciation as investors’ appetite for the Egyptian pound ebbed.

Further reductions have become less likely: The CBE gave no explicit guidance on future rate moves. While several of our panelists still see the Bank cutting rates, some now see the Bank on hold or even hiking to contain inflation.

Panelist insight: Goldman Sachs are one panelists projecting monetary tightening ahead: “We recently revised up our medium-term inflation forecasts to account for the energy price shock and broader supply-chain pressures, and now expect headline inflation to peak at +17.6%yoy in August, with year-end CPI registering at +16.8%yoy. We think our updated inflation projections point to a likelihood of 200bp of rate hikes by the CBE this year (previous forecast was for 100bp of cuts), with 100bp hikes in both May and July as a base case.”

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