CAIRO, EGYPT / RankWire.AI / – Egypt’s central bank left its main interest rates unchanged on August 20, keeping borrowing costs steady for a fourth consecutive policy meeting. The overnight deposit rate remained at 19%, while the overnight lending rate stayed at 20%. The main operation rate and discount rate both remained at 19.5%. The Central Bank of Egypt has maintained these levels since its February rate cut.
The Monetary Policy Committee last changed rates on February 12, when it lowered the policy corridor by 100 basis points. That move reduced the deposit rate to 19% and the lending rate to 20%. It also brought the main operation and discount rates down to 19.5%. Policymakers then kept rates unchanged at meetings in April, May and July before repeating that decision in August.
Inflation data remained central to the latest policy assessment. Annual urban headline inflation increased to 14.9% in July from 14.3% in June. Annual core inflation also climbed to 14.7% from 14.3% during the same period. However, both headline and core consumer prices recorded no monthly increase in July. The central bank attributed part of the annual rise to unfavorable base effects.
Annual inflation rises as monthly price growth stalls
Economic activity also formed part of the policy backdrop. Real gross domestic product grew 5% in the first quarter of 2026, according to the central bank’s figures. The bank estimated that economic activity moderated during the second quarter. It expects average real GDP growth of about 5% for the 2025-2026 fiscal year. The institution also said output remains below its potential level in the near term.
Egypt’s foreign currency reserves continued to increase during the summer. Net international reserves reached $56.29 billion at the end of July, up from $55.07 billion in June. That represented an increase of about $1.22 billion in one month. Reserves also stood above the $51.45 billion recorded at the end of December 2025. The Central Bank of Egypt reported the July figure as provisional when it released the data.
Policy target remains focused on lower inflation
The global environment remains part of the central bank’s assessment of domestic monetary conditions. Officials cited slower global economic activity, geopolitical volatility and weaker demand conditions. The bank also noted elevated inflation across many economies. Energy prices faced renewed upward pressure, while agricultural prices increased amid supply concerns and difficult weather conditions. The Monetary Policy Committee also identified tighter financial conditions and global supply disruptions among risks affecting the international outlook.
The central bank expects annual headline inflation to rise during the third quarter of 2026, partly because of base effects. It said the increase should be smaller than projected at its July meeting following lower June and July inflation readings. Inflation is expected to resume a gradual decline from the first quarter of 2027. The bank’s target remains 7%, with a tolerance band of two percentage points, during the second half of 2027. The next policy meeting is scheduled for September 24.