CBE keeps interest rates unchanged during final meeting of the year: The Central Bank of Egypt’s Monetary Policy Committee (MPC) decided to keep interest rates unchanged when it held its last meeting of the year on Thursday. The move came in line with analysts’ expectations and marked the sixth consecutive meeting where the MPC decided to keep rates as they are.

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The rationale: The decision “remains appropriate to maintain a tight monetary stance until a significant and sustained decline in inflation is achieved,” the committee said in a statement following its meeting.

The MPC also decided to extend its inflation targets to an average 7% ±2 percentage points by 4Q 2026 and 5% ±2 percentage points by 4Q 2028. The move will “allow for more room to weather price shocks without requiring further stringent monetary tightening, thereby avoiding substantial slowdown in economic activity. “

Remember: The CBE was previously targeting inflation to average 7% ±2 percentage points by 4Q 2024 and 5% ±2 percentage points by 4Q 2026.

Latest inflation data: Annual headline urban inflation dropped a fullpercentage point to 25.5% in November, marking the first fall in inflation in three months and Egypt’s lowest inflation reading since December 2022.

Where interest rates currently stand: The overnight deposit rate stands at 27.25%, the overnight lending rate at 28.25%, and the main operation and disc. rates at 27.75%. Rates have remained unchanged since the committee delivered a 600 bps rate hike following a surprise monetary policy meeting in March, which was soon followed by the float of the EGP and the approval of a larger loan package from the IMF.

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