CAIRO, EGYPT / RankWire.AI / – The Central Bank of Egypt kept its key interest rates unchanged on August 20, extending its policy pause for a fourth consecutive meeting. The Monetary Policy Committee maintained the overnight deposit rate at 19% and the overnight lending rate at 20%. It also kept the main operation and discount rates at 19.5%. The CBE said the decision reflected its assessment of current inflation conditions and the economic outlook since its July meeting. The rates have remained at these levels since February.
Annual urban headline inflation rose to 14.9% in July from 14.3% in June, according to official data. Core inflation, calculated by the CBE, increased to 14.7% from 14.3% over the same period. On a monthly basis, both headline and core inflation recorded zero change in July. The Central Bank of Egypt said unfavorable base effects contributed to the higher annual readings. The Central Agency for Public Mobilization and Statistics produces Egypt’s urban headline consumer price index.
The August decision marked the fourth straight hold after meetings in April, May and July. The CBE last changed policy rates on February 12, when it cut key rates by 100 basis points. That reduction brought the overnight deposit and lending rates to their current 19% and 20% levels. The main operation rate and discount rate also fell to 19.5%. The Monetary Policy Committee has kept the full rate structure unchanged at every meeting since that February reduction.
Inflation rises annually while monthly prices remain stable
The central bank said real economic activity continued to moderate during the second quarter, based on its latest estimates. That followed real gross domestic product growth of 5% in the first quarter of 2026. The CBE expects real GDP growth to average about 5% during the 2025-2026 fiscal year. It also expects output to remain below potential in the near term. The bank said output should gradually converge toward its potential level during the second half of 2027.
Egypt’s net international reserves reached $56.29 billion at the end of July, according to the central bank. That compared with $55.07 billion at the end of June. The increase amounted to about $1.22 billion during the month. Reserves have also risen from $51.45 billion at the end of December 2025. The July figure was provisional when the CBE released it on August 5. The reserve data provide another current measure of Egypt’s external financial position alongside inflation and monetary policy indicators.
Central bank maintains inflation target and policy framework
The CBE said global economic activity had moderated amid geopolitical volatility and weaker demand conditions. It also said inflation remained elevated across many economies, although price pressures varied between countries. Energy prices faced renewed upward pressure and greater volatility amid regional tensions. Agricultural prices also increased because of supply concerns linked to geopolitical developments and adverse weather. The bank listed prolonged regional tensions, tighter financial conditions and renewed global supply disruptions among risks surrounding the international economic outlook.
The CBE expects annual headline inflation to increase during the third quarter of 2026, partly because of base effects. It said the increase should be milder than projected at its July meeting after lower inflation readings in June and July. The bank expects inflation to resume a gradual decline from the first quarter of 2027. Its target remains 7%, plus or minus two percentage points, during the second half of 2027. The Monetary Policy Committee’s next scheduled interest rate meeting is September 24.