Cairo: The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) has decided to keep key interest rates unchanged for the fifth consecutive time. The overnight deposit rate, overnight lending rate, and primary operations rate will all remain steady at 28.25 percent, 27.75 percent, and 27.75 percent, respectively. This decision is part of the CBE’s ongoing monetary policy strategy.

According to State Information Service Egypt, the CBE has raised key interest rates by eight percent in 2024, amounting to a total increase of 19 percent since the monetary tightening cycle began in March 2022. This indicates a significant shift in the central bank’s approach to managing the country’s monetary policy. The next MPC meeting is scheduled for 26 December, where further evaluations will be made.

Fitch Ratings, an American credit rating agency, has projected that the CBE will commence easing its monetary policy in 2025, with interest rates expected to decrease by 1,200 basis points to 16.25 percent by the end of
the year. Meanwhile, Egypt’s annual headline inflation has increased for the third consecutive month, rising to 26.3 percent in October, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

Despite the rise in headline inflation, Egypt’s annual core inflation rate has decreased for the second consecutive month, falling to 24.4 percent in October. The MPC has highlighted that inflation is likely to persist near current levels until the end of 2024, with risks such as geopolitical tensions and potential trade protectionism contributing to the economic outlook. However, inflation is projected to ease significantly starting in the first quarter of 2025 as the effects of monetary policy tightening and a favorable base effect take hold.

A report by BMI anticipates that inflation will drop below 20 percent by February 2025, suggesting a potential easing of economic pressures in the near future.