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Egypt’s Central Bank Slashes Key Interest Rates by 225 Basis Points to Spur Economic Growth
In a bold move aimed at bolstering economic activity, the Central Bank of Egypt (CBE) has reduced its key interest rates by 225 basis points. The decision was announced following the conclusion of the bank’s Monetary Policy Committee (MPC) meeting held on Thursday.
This marks a significant shift in Egypt’s monetary policy trajectory as the overnight deposit rate, overnight lending rate, and the rate of the main operation were each cut to 27.25%, 28.25%, and 27.75% respectively. Correspondingly, the discount rate was slashed to 27.75%.
According to the CBE, the decision comes as part of a broader strategy to support domestic economic activity and reflects growing confidence in the trajectory of declining inflation. Latest figures point to a notable drop in headline inflation, which dipped to 28.1% in May 2024, down from 32.5% in April, showcasing a sustained disinflation trend.
The bank emphasized that this decline can be attributed to improved supply chains, stable foreign exchange markets, and the impact of previous monetary tightening cycles. These developments have contributed to controlling inflationary pressures, allowing room for policy easing.
The CBE added that the monetary policy stance would remain data-driven, ensuring that future interest rate decisions align with long-term objectives for price stability and economic sustainability.
The rate cut also aligns with wider economic reforms and increased foreign investments, which have provided a much-needed cushion to the Egyptian economy amid global economic uncertainty.
V.2 Editorial Team
