Egypt: CBE Lowers Interest Rate by 225 Basis Points as Inflation Eases

(3 Minutes Read)  

The move comes as Egypt continues to see signs of economic recovery, with GDP growth in the first quarter of 2025 exceeding the 4.3% recorded in the previous quarter. Strong non-oil manufacturing, trade, and tourism performance led the gains, though overall activity remains below full capacity.

The Central Bank of Egypt (CBE) has lowered its key interest rates by 225 basis points, amidst signs of easing inflation. Following the Monetary Policy Committee’s meeting on April 17, the overnight deposit and lending rates now stand at 25% and 26%, respectively, while the main operation and discount rates are at 25.50%.

The move comes as Egypt continues to see signs of economic recovery, with GDP growth in the first quarter of 2025 exceeding the 4.3% recorded in the previous quarter. Strong non-oil manufacturing, trade, and tourism performance led the gains, though overall activity remains below full capacity.

Inflation, meanwhile, has shown clear signs of cooling. Annual headline inflation dropped to 13.6% in March 2025, while core inflation fell to 9.4%—the lowest in nearly three years. Food price inflation sharply declined from 45% a year ago to just 6.6%.

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The CBE said the rate cut aims to support the downward trend in inflation while maintaining monetary discipline. It reaffirmed its inflation target of 7% (±2%) by Q4 2026, pledging to respond proactively to any economic risks.