CAIRO, EGYPT / RankWire.AI / – On Thursday, Egypt’s central bank decided to keep its benchmark interest rates steady, maintaining the levels set in February. The Monetary Policy Committee left the overnight deposit rate at 19.00% and the overnight lending rate at 20.00%. Additionally, both the main operation rate and the discount rate remained at 19.50%. The Central Bank of Egypt explained that this decision was based on its review of inflation, economic conditions, and potential risks related to the outlook for prices.
Official data shows that annual urban headline inflation decreased to 14.5% in August from 14.9% in July. Monthly urban inflation increased by 0.1% after remaining unchanged in July. During the same period, core inflation experienced an upward trend. The annual core inflation rate rose to 14.9% from 14.7%, while the monthly rate was 0.3%. These figures indicate a moderation in overall price pressures, although the core measure remains elevated.
The decision in September continues a trend of holding interest rates steady, following a rate cut earlier this year. In February, the committee reduced rates by 100 basis points, bringing the deposit rate down to 19.00%. At that time, the lending rate decreased to 20.00%. Also in February, the Central Bank of Egypt lowered the required reserve ratio for commercial banks from 18% to 16%. Since then, rates have been maintained at their current levels.
Inflation persists above central bank target
Egypt’s inflation target is set at 7%, with an allowable deviation of plus or minus 2 percentage points, on average during the fourth quarter of 2026. However, August’s headline inflation remained above this range. Recent monthly data shows limited fluctuations in consumer prices. Urban prices declined by 0.4% in June, stayed flat in July, and increased by 0.1% in August. The annual urban inflation rate rose from 14.3% in June to 14.9% in July before easing slightly in August.
Over the same period, core inflation followed a different trajectory. It increased from 14.3% in June to 14.7% in July and reached 14.9% in August. This measure excludes volatile items and offers an alternative view of underlying price trends. The latest data was taken into account by the Monetary Policy Committee prior to its September decision. Monthly inflation figures continue to be published alongside scheduled interest rate announcements.
Egypt keeps borrowing costs unchanged
Egypt’s external financial indicators also contributed to the broader economic data considered before the rate decision. As of the end of August, net international reserves stood at $57.2145 billion, according to provisional figures from the central bank. This reserve level was reported along with other monetary and financial statistics released during the month. The government continues to publish regular updates on reserves, inflation, exchange rates, and banking conditions through official reports.
This September meeting marks the sixth scheduled monetary policy gathering of 2026. The only change in key policy rates this year occurred in February. The official calendar lists two additional meetings, scheduled for October 29 and December 17. Until any new decision is announced, the deposit rate remains at 19.00%, the lending rate at 20.00%, and both the main operation rate and discount rate stay at 19.50%.