Urgent.. The Central Bank decides to stabilize interest rates
The Monetary Policy Committee of the Central Bank of Egypt decided at its meeting to keep the overnight deposit and lending rates and the Central Bank’s main operation rate at 21.00%, 22.00% and 21.50%, respectively, and also decided to keep the credit and discount rates at 21.50%. Inflation developments and expectations since its previous meeting.
He added that, globally, indicators indicate a continued recovery in economic growth, although expectations are still affected by uncertainty regarding trade policies and the continuation of geopolitical tensions.
In the face of these conditions, central banks in both developed and emerging markets have committed to a cautious approach in facilitating their monetary policies. He explained that for commodity markets, oil prices remained generally stable while the prices of many agricultural products witnessed a decline. However, there are still upward risks surrounding the path of inflation, especially from potential disruptions in supply chains.
On the domestic side, estimates of the Central Bank of Egypt indicate a slight increase in the real growth rate of the gross domestic product to record 5.2% in the third quarter of 2025 compared to 5.0% in the second quarter of the same year, This rise was driven by notable growth in the non-petroleum manufacturing, trade and tourism sectors. Accordingly, estimates indicate that output will continue to approach its maximum capacity, which is expected to be reached by the end of the 2025/2026 fiscal year. As for the labor market, the unemployment rate recorded 6.4% in the third quarter of 2025 compared to 6.1% in the previous quarter.
With regard to inflation developments, the annual rate recorded Headline inflation was 12.5% in October 2025 compared to 11.7% in September 2025. Likewise, the annual rate of core inflation rose to 12.1% in October 2025 compared to 11.3% in September 2025.
As for the monthly developments in inflation, they were contrary to their usual seasonal patterns as a result of the rise in prices of non-food goods, especially services, which limited The impact of the slowdown in food commodity inflation. In light of these developments, it is necessary for monthly inflation developments to decline further in order for the inflation rate to reach the target of the Central Bank of Egypt.
He added, based on the above, it is expected that the annual rate of general inflation will rise in the late fourth quarter of 2025, reflecting the impact of the increase in energy prices, before it declines again in the second half of 2026, approaching the Central Bank’s target. Al-Masry.
He pointed out that, however, inflation expectations are still vulnerable to global and local upside risks, including the possibility of escalating geopolitical tensions, the relative stability of service price inflation, and the effects of fiscal consolidation measures exceeding expectations. The bank stated that these risks require careful monitoring of inflation developments and their impact on its path over the time horizon of expectations, and also require a cautious approach towards the monetary easing cycle.
It added, therefore, the Monetary Policy Committee decided to follow a wait-and-see approach by keeping the central bank’s core interest rates unchanged, which is considered appropriate for maintaining a monetary policy that would contain inflationary pressures, consolidate expectations, and restore the downward path. For inflation.
He indicated that the committee will continue to evaluate its decisions on the basis of each meeting separately, emphasizing that these decisions depend on the expectations and risks surrounding them and new data, and will not hesitate to use all the tools available to it to achieve price stability by directing inflation towards its target of 7% (± 2 percentage points) in the fourth quarter of 2026, on average.
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