Egypt’s central bank has opted to keep its benchmark interest rates unchanged, maintaining a cautious stance as inflation shows signs of moderation while policymakers continue to monitor regional developments and their impact on the economy.
Following its latest Monetary Policy Committee meeting, the Central Bank of Egypt left the overnight deposit rate at **19%** and the overnight lending rate at **20%**, saying the decision reflects its assessment of current inflation trends and the broader economic outlook since its previous review.
The central bank acknowledged that economic activity is likely to slow modestly during the second quarter of 2026, citing the effects of ongoing regional tensions on domestic growth. Despite the expected short-term slowdown, it projects Egypt’s real GDP to expand by around **5%** during the 2025/26 fiscal year.
The decision was widely anticipated by financial markets, with economists expecting policymakers to pause after weighing the balance between easing inflationary pressures and external economic risks.
Fresh inflation figures released on Thursday offered a mixed picture. Annual urban consumer inflation edged lower to **14.3% in June**, compared with **14.6% in May**, indicating that headline price pressures continued to soften.
However, core inflation—which excludes more volatile components such as food and fuel—moved higher, rising to **14.3%** from **13.8%** a month earlier. The increase suggests that underlying inflationary pressures remain present even as overall consumer inflation eases.
By holding borrowing costs steady, the central bank signaled that it prefers to maintain monetary stability while closely tracking inflation dynamics and the evolving regional economic environment before considering any further policy adjustments.
