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The stabilization follows the government’s decision to liberalize the Egyptian pound’s exchange rate on May 23. The Central Bank attributes this success to its monetary tightening policy, which has reduced inflation and stabilized exchange rates.
Egypt’s interest rate has stabilized for the first time in 2024. The Central Bank announced recently that the rate is now 27.75%, following two consecutive hikes aggregating a whopping 800 basis points. Inflation also fell to 28.1% in May, down from 32.5% in April.
The stabilization follows the government’s decision to liberalize the Egyptian pound’s exchange rate on May 23. The Central Bank attributes this success to its monetary tightening policy, which has reduced inflation and stabilized exchange rates.
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The Central Bank’s report forecasts that inflation will continue to decline in 2024 as inflationary pressures ease, with a significant drop expected in the first half of 2025. The high inflation of the past year was mainly due to rapid money supply growth. However, recent measures to reduce excess liquidity, eliminate the parallel currency market, and lower inflation indicate ongoing progress.
