The Central Bank of Egypt announced a 2% reduction in deposit and lending interest rates during its fifth monetary policy meeting of the year, marking the third rate cut since the beginning of 2025. This move follows recent data showing a decline in annual urban consumer price inflation to 13.9% in July, down from 14.9% in June, driven by lower prices for meat, poultry, fruits, and vegetables. Monthly inflation also contracted by 0.5%. n nDespite a slight rise in core inflation to 11.6% from 11.4% the previous month, the central bank’s decision reflects confidence in the improving inflation trajectory. The latest adjustment brings cumulative cuts to 5.25% since early 2025, after two earlier reductions totaling 3.25% and two meetings with no changes. n nThis policy aims to balance economic growth support with inflation control. In March 2024, the central bank transitioned to a flexible exchange rate regime, allowing the pound to float based on supply and demand, backed by an $8 billion IMF financing program. At that time, interest rates were raised to counter high inflation. n nAnalysts interpret the current rate reduction as a signal of policymakers’ growing confidence in inflation stabilization. The move is expected to ease borrowing costs for businesses and individuals, stimulate investment and economic activity, and maintain Egypt’s appeal to foreign capital inflows. n— news from (publisher\field) n
— News Original —nEgypt’s Central Bank Cuts Interest Rates by 2% for the Third Time in 2025nThe Central Bank of Egypt announced today, Thursday, a 2% reduction in deposit and lending interest rates, during its fifth monetary policy committee meeting of the current year, marking the third cut since the beginning of 2025. n nThe decision comes amid recent developments in inflation indicators, as data from the Central Agency for Public Mobilization and Statistics showed a decline in the annual inflation rate for consumer prices in urban areas to 13.9% in July, compared to 14.9% in June, driven by falling prices of meat, poultry, fruits, and vegetables, while monthly inflation recorded a contraction of 0.5%. n nOn the other hand, core inflation rose slightly to 11.6% compared to 11.4% in June, according to central bank data. n nThis cut marks the third since the beginning of the year, after the central bank reduced interest rates twice by a total of 3.25%, while keeping them unchanged in two consecutive meetings, as part of a policy aimed at balancing economic growth support with controlling inflation rates. n nThe Central Bank of Egypt allowed, in March 2024, the liberalization of the pound’s exchange rate to be determined according to supply and demand mechanisms, supported by an $8 billion financing program with the International Monetary Fund, alongside raising interest rates at the time to control the inflationary wave. n nAnalysts believe the latest rate cut reflects monetary policymakers’ confidence in the improving inflation path in the coming period, expecting the decision to ease financing burdens on companies and individuals, stimulate investment and economic activity, while maintaining the attractiveness of the Egyptian market to foreign inflows.