Cairo: The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) has reduced its key policy rates by 100 basis points and lowered the required reserve ratio (RRR) for commercial banks to 16 percent in its latest meeting.

According to State Information Service Egypt, the overnight deposit rate has been adjusted to 19 percent, the overnight lending rate to 20 percent, and the main operation rate to 19.5 percent. Additionally, the discount rate was also cut to 19.5 percent. The MPC stated that the decision was based on a comprehensive evaluation of declining inflationary pressures and the changing economic outlook.

Globally, the MPC observed that economic growth remains steady, aided by accommodative financial conditions. However, the committee highlighted ongoing risks due to geopolitical tensions, trade policy uncertainty, and decreasing demand in major economies. Despite these challenges, inflation has remained stable in both advanced and emerging markets, leading most central banks to proceed
with caution regarding monetary easing.

Domestically, the CBE’s nowcast suggests a slight decline in growth for the fourth quarter of 2025, with real GDP projected to grow at approximately 4.9 percent, compared to 5.3 percent in the previous quarter. Growth has been driven primarily by non-petroleum manufacturing, tourism, and communications. The CBE forecasts an average real GDP growth of 5.1 percent for the fiscal year 2025/2026, an increase from 4.4 percent the previous year.

Inflation rates have continued to decrease, with annual headline and core inflation reported at 11.9 percent and 11.2 percent, respectively, in January 2026, down from 12.3 percent and 11.8 percent in December 2025. Average headline and core inflation showed a significant drop in 2025, reaching 14.1 percent and 12.1 percent, from 28.3 percent and 27.2 percent in 2024.