The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE)
has decided to keep its key policy rates unchanged. The overnight deposit rate, overnight
lending rate, and the rate of the main operation remain at 19.00 percent, 20.00 percent, and
19.50 percent, respectively. The discount rate was also maintained at 19.50 percent. This
decision reflects the Committee’s assessment of current inflation dynamics and the evolving
outlook since the previous MPC meeting.
Globally, economic activity has moderated, weighed down by geopolitical volatility and subdued
demand. Inflation remains broadly elevated, though price pressures are uneven across economies,
leading central banks to follow divergent policy stances aligned with respective economic
conditions. In commodity markets, energy prices have come under renewed upward pressure and
exhibited heightened volatility amid escalating regional tensions. Similarly, agricultural prices
have trended higher, reflecting supply concerns driven by geopolitical tensions and adverse
weather conditions. Overall, the global outlook remains uncertain and susceptible to risks,
particularly prolonged tensions, tighter financial conditions, and renewed supply chain disruptions.
Domestically, a continued moderation in real economic activity is estimated for Q2 2026 according
to the CBE nowcast, reflecting the adverse impact of regional tensions on economic activity,
following a moderation to 5.0 percent in Q1 2026. Accordingly, the CBE expects real GDP growth
to average around 5.0 percent in FY 2025/26, with output remaining below potential, though
expected to gradually converge toward potential by H2 2027. As such, the output gap trajectory
indicates that demand-pull inflationary pressures will remain limited in the short term, supported
by the prevailing tight monetary policy stance
