Central Bank of Egypt Holds Interest Rates at 25.5% for the Third Time in 2026

The Central Bank of Egypt kept key interest rates unchanged at its recent Monetary Policy Committee meeting, with the deposit rate remaining at 25.5% and the lending rate at 26.5%, marking the third consecutive time the bank has refrained from adjusting rates during 2026, following a previous reduction that brought interest rates down from their peak.

The Monetary Policy Committee noted that the decision came in light of a careful balance between the trajectory of inflation and the improvement of external indicators, reflecting a shift in the equation faced by the central bank throughout the monetary tightening phase, where the primary objective was to confront the wave of inflation that swept the Egyptian economy in recent years.

On the external front, Egypt witnessed a noticeable improvement in its economic indicators, including an increase in foreign exchange reserves and a decline in pressures on the balance of payments, which afforded the central bank broader flexibility in managing monetary policy without the need for an additional interest rate hike.

Investors and economic analysts are awaiting upcoming inflation data to determine the timing of the next cut, while borrowing costs remain high for Egyptian companies and households, at a time when real economic sectors need lower-cost financing to support investment and growth.

What do these terms mean?

Monetary Policy Committee: The body responsible within the central bank for setting interest rates periodically based on inflation, growth, and external position indicators.

Deposit Rate: The percentage paid by the central bank to commercial banks in exchange for depositing their excess liquidity with it, forming the minimum floor for interest rates in the market.

Monetary Tightening: A policy adopted by the central bank by raising interest rates to reduce liquidity and curb inflation, as opposed to monetary easing, which lowers interest rates to stimulate the economy.