CBE Eases Interest Rates Again by 1% as Inflation Shows Signs of Cooling

CAIRO - 22 May 2025: The Monetary Policy Committee of the Central Bank of Egypt (CBE) has decided to cut the overnight deposit rate, lending rate, and the main operation rate by 100 basis points, bringing them to 24.00 percent, 25.00 percent, and 24.50 percent, respectively. The credit and discount rate was also lowered by 100 basis points to 24.50 percent.

This move follows a larger rate cut in April, when the CBE reduced key interest rates by 225 basis points in a clear signal of the beginning of a monetary easing cycle. At that time, following the Monetary Policy Committee’s meeting on April 17, the overnight deposit and lending rates stood at 25.00 percent and 26.00 percent, with the main operation and discount rates at 25.50 percent.

According to the Committee, the latest cut reflects a careful balancing act—addressing existing economic risks while maintaining the flexibility to proceed with further monetary easing. It also reinforces efforts to steer inflation downward over the forecast period.

The decision comes amid mixed inflation signals. According to the Central Agency for Public Mobilization and Statistics (CAPMAS), Egypt’s Consumer Price Index (CPI) rose by 1.5 percent in March 2025 compared to February, reaching 250.6 points. This increase was largely driven by surging food and beverage prices, with fruit prices spiking by 23.6 percent, vegetables rising by 3.1 percent, and meat and poultry climbing by 2.8 percent.

Despite short-term price pressures, the CBE appears confident in the broader trend of easing inflation and stable economic growth, allowing room for further interest rate adjustments in the months ahead.