CAIRO, EGYPT / RankWire.AI / – Egypt’s central bank has decided to keep its key interest rates steady on August 20. This marks the fourth consecutive policy meeting with unchanged borrowing costs. The overnight deposit rate remains at 19%, and the overnight lending rate stays at 20%. Both the main operation rate and discount rate are still at 19.5%. These levels have been in place since the bank’s February rate cut.
The Monetary Policy Committee last adjusted rates on February 12. They lowered the policy corridor by 100 basis points. This reduced the deposit rate to 19% and the lending rate to 20%. It also brought the main operation and discount rates down to 19.5%. Since then, rates have remained steady through meetings in April, May, July, and now August.
Inflation figures played a key role in the latest decision. In July, annual urban headline inflation increased to 14.9% from 14.3% in June. Core inflation rose to 14.7% from 14.3% during the same period. Despite this, both headline and core consumer prices did not increase month-on-month in July. The central bank linked the annual rise partly to unfavorable base effects.
Annual inflation climbs as monthly prices stay steady
Economic activity was also a factor. The central bank’s data shows real gross domestic product grew by 5% in the first quarter of 2026. It estimates that growth slowed in the second quarter. For the 2025-2026 fiscal year, the bank projects an average real GDP growth of about 5%. It also stated that output remains below its potential level in the near term.
Egypt’s foreign currency reserves increased over the summer. By the end of July, net international reserves reached $56.29 billion, up from $55.07 billion in June. That is an increase of approximately $1.22 billion in just one month. Reserves are also above the $51.45 billion recorded at the end of December 2025. The Central Bank of Egypt noted that the July figure is provisional.
Focus on reducing inflation remains central to policy
The global environment influences Egypt’s monetary stance. Officials mentioned slower economic activity worldwide, geopolitical tensions, and weaker demand. They also highlighted persistent inflation in many economies. Energy prices have risen again, and agricultural prices increased due to supply issues and adverse weather. The Monetary Policy Committee also flagged tighter financial conditions and global supply disruptions as risks to the international outlook.
The central bank expects headline inflation to rise during the third quarter of 2026, partly because of base effects. It anticipates this increase will be smaller than projected at its July meeting, thanks to lower inflation in June and July. From the first quarter of 2027 onward, inflation should gradually decline. The bank’s target is 7%, with a tolerance of two percentage points, during the second half of 2027. The next policy meeting is set for September 24.