Egypt Central Bank Expected to Hold Interest Rates Amid Inflation Shifts

The Central Bank of Egypt’s (CBE) Monetary Policy Committee convenes Thursday to determine interest rates, marking its seventh scheduled meeting this year. Analysts anticipate the committee will maintain current rates for the sixth consecutive time, keeping the overnight deposit rate at 19% and the overnight lending rate at 20%.

Inflation Trends and Policy Outlook

The committee’s previous decisions have maintained the main operation rate and discount rate at 19.5%. In its September statement, the bank indicated these decisions stemmed from assessments of inflation developments and associated risks. The CBE has stated it will continue to monitor economic conditions and use available tools to maintain price stability.

Economic data from September 2026 shows mixed results. Annual core inflation declined to 14.1% from 14.9% in August, according to the CBE. Similarly, the Central Agency for Public Mobilisation and Statistics reported that annual urban inflation dropped to 13.9% from 14.5% in August. However, monthly price increases rose to 1.3% in September, up from 0.1% the previous month, largely driven by rising vegetable and food costs.

Market Expectations and Regional Risks

Earlier in September, the CBE lowered its inflation forecasts, projecting headline inflation will stabilize during the third quarter of 2026 before trending toward a target of 7% by the second half of 2027. The bank noted that current monetary conditions remain restrictive enough to support this downward trajectory.

Despite this, the central bank cautioned that risks remain, particularly regarding regional hostilities that could impact domestic inflation. Eleven financial institutions and investment banks surveyed expect the committee to keep rates steady on Thursday. These expectations persist despite inflationary pressures from high global commodity prices and the depreciation of the Egyptian pound against the dollar.