Egypt's central bank holds its overnight deposit rate at 19%
Victoria Shinder2 min readThe Monetary Policy Committee of the Central Bank of Egypt kept its key rates unchanged on 24 September. The overnight deposit rate stays at 19.00%, the overnight lending rate at 20.00%, and the rate on the main operation and the discount rate at 19.50%.
The domestic data in the statement point toward easing. Annual headline inflation slipped to 14.5% in August, mainly because food inflation declined, offsetting higher electricity tariffs and rents; core inflation was steady at 14.9%. Monthly inflation was minus 0.4% in June, 0.0% in July and 0.1% in August. Because those outcomes were better than expected, the CBE lowered its inflation forecast from its August meeting: it now expects headline inflation to stabilise on average in the third quarter and then slow gradually towards its target of 7%, plus or minus two percentage points, in the second half of 2027.
Growth has slowed. Real GDP grew 4.7% in the second quarter of 2026, down from 5.0% in the first, which the statement attributes mainly to regional tensions; growth averaged 5.1% in the 2025/26 fiscal year and is expected to stay near that level in 2026/27. Output remains below potential and is projected to reach full capacity in the second half of 2027, so the Committee sees limited demand-side pressure on prices in the short term.
What it means
The CBE is choosing to bank its disinflation rather than spend it. With inflation falling and its own forecast revised down, a cut would have been easy to justify on the domestic numbers. The statement instead describes the current level of restriction as a buffer, and lists the risks it is meant to absorb: renewed regional hostilities, pass-through from fiscal consolidation measures such as tariff increases, and international food and energy prices that could stay high for longer.
That caution reflects the gap that remains. Even at 14.5%, inflation is well above the 9% top of the target band, and the CBE's own forecast only reaches the band in the second half of 2027. For readers following the pound, the figure the statement implies is the real policy rate: a 19% deposit rate against 14.5% inflation leaves it at about 4.5 percentage points. The Committee said it will keep evaluating its stance as conditions, the forecast and the balance of risks evolve, and stands ready to use all available tools.