Egypt’s central bank keeps interest rates unchanged during its first meeting of 2025

CAIRO - 20 February 2025: Egypt’s Central Bank (CBE) held interest rates steady for the seventh consecutive time during its first meeting of 2025, maintaining the overnight deposit rate at 27.25 percent, the overnight lending rate at 28.25 percent, and the main operation rate at 27.75 percent. The discount rate was also kept unchanged at 27.75 percent.

 

The Monetary Policy Committee (MPC) of the Central Bank of Egypt noted that the decision reflects the CBE’s cautious approach as it balances domestic economic recovery with persistent inflation risks and global uncertainties. While some central banks worldwide have begun cutting rates, others remain hesitant due to volatile commodity prices, geopolitical tensions, and the potential impact of U.S. protectionist trade policies.

 

According to the MPC, preliminary data for the fourth quarter of 2024 indicates Egypt’s economic growth accelerated, driven by strong performances in manufacturing and transportation. The unemployment rate also improved, dropping to 6.4 percent in Q4 2024 from 6.7 percent in the previous quarter. However, real gross domestic product remains below its potential, supporting the disinflationary trend in the short term.

 

Annual headline inflation stabilized at 24 percent in January 2025, with core inflation at 22.6 percent. Food inflation continued to ease, reaching 20.8 percent, but non-food inflation remained stubbornly high at an average of 25.5 percent throughout 2024. Upside risks to inflation have increased, fueled by global commodity price volatility and regional geopolitical tensions.

 

Despite these challenges, the CBE expects inflation to decline significantly in the first quarter of 2025, supported by monetary tightening and favorable base effects. However, fiscal tightening measures may slow the pace of disinflation later in the year.

 

The CBE emphasized that current rates are appropriate to maintain a tight monetary stance and anchor inflation expectations. The timing of any future rate cuts will depend on inflation trends and the balance of risks.

 

“The MPC will not hesitate to utilize all tools at its disposal to achieve price stability,” the CBE stated, signaling its commitment to steering inflation toward its target while supporting economic growth.