CAIRO, EGYPT / RankWire.AI / – Central Bank of Egypt held its key interest rates steady on August 20, marking the fourth consecutive meeting without policy changes. The Monetary Policy Committee kept the overnight deposit rate at 19% and the overnight lending rate at 20%. It also maintained the main operation and discount rates at 19.5%. The CBE explained that this decision reflected its assessment of current inflation and the economic outlook since its July meeting. These rates have remained unchanged since February.
Official data shows that annual urban inflation rose to 14.9% in July from 14.3% in June. Core inflation, as calculated by the CBE, increased from 14.3% to 14.7% over the same period. In July, both headline and core inflation showed no change on a monthly basis. The Central Bank of Egypt noted that unfavorable base effects contributed to the higher yearly figures. Egypt’s urban consumer price index is produced by the Central Agency for Public Mobilization and Statistics.
The rates stay steady for the fourth month in a row after April, May, and July meetings. The last change in policy rates occurred on February 12, when the CBE cut key rates by 100 basis points. That cut brought the overnight deposit and lending rates to their current levels of 19% and 20%. The main operation and discount rates also fell to 19.5%. Since that reduction, the Monetary Policy Committee has kept the rate structure unchanged at each meeting.
Inflation climbs annually, but monthly prices hold steady
The central bank stated that real economic activity showed signs of moderation during the second quarter. This follows a 5% growth in real gross domestic product in the first quarter of 2026. The CBE anticipates an average real GDP growth of about 5% for the 2025-2026 fiscal year. It also expects output to stay below its potential in the near future. The bank forecast that output would gradually align with potential levels in the second half of 2027.
Egypt’s net international reserves reached $56.29 billion at the end of July, up from $55.07 billion at the end of June. The reserves increased by approximately $1.22 billion during July. Compared to $51.45 billion at the end of December 2025, reserves have grown significantly. The July figure was provisional when the CBE published it on August 5. These reserves, along with inflation and monetary policy indicators, help gauge Egypt’s external financial health.
The central bank maintains its inflation target and policy approach
Global economic activity has slowed amid geopolitical tensions and weaker demand, the CBE said. Inflation remains high in many economies, although the level of price pressures varies. Energy prices have faced renewed upward pressure and increased volatility due to regional tensions. Agricultural prices also rose because of supply concerns linked to geopolitical issues and adverse weather conditions. The bank listed prolonged regional tensions, tighter financial conditions, and renewed global supply disruptions as key risks to the international economic outlook.
The CBE projects that headline inflation will increase during the third quarter of 2026, partly due to base effects. It expects this rise to be milder than previously projected in July, following lower inflation in June and July. Inflation should then gradually decline starting from the first quarter of 2027. The central bank’s inflation target remains 7%, with a tolerance of plus or minus two percentage points, through the second half of 2027. The next scheduled meeting of the Monetary Policy Committee is on September 24.