CBE raises key rates by 100 bps

The headlines at home this week were a mixed bag. Locally, the week was about money: rates saw a hike when most analysts expected a hold, the IMF mission arrived early to start the final reviews that could unlock USD 2.3 bn, and Banque du Caire’s record-setting IPO pricing anchored a busy run on the capital markets. All of it came with the EGP weakening past 56 against the USD and the EGX30 sliding to fresh lows, which pushed importers’ costs up. Abroad, Washington pitched business incentives to bring Kyiv and Moscow to the table, Lula snagged a fourth term in Brazil, and protests spread across Europe.

ECONOMY-

The Central Bank of Egypt’s (CBE) Monetary Policy Committee raised interest rates by 100 bps at its meeting yesterday, according to a CBE statement. The overnight deposit rate rises to 20.0%, the overnight lending rate to 21.0%, and the main operation and discount rates to 20.5%.

The CBE cited challenging external conditions and elevated uncertainty, and said the move aims to keep expectations anchored and safeguard the disinflation trajectory. The hike runs against the majority of analysts polled by EnterpriseAM, who expected a hold, though some had warned a hike was back in play. It comes as the greenback hits fresh highs and the EGX30 reaches fresh lows, closing 3.56% down on Sunday at 49.2k points. This marks the first rate hike since March 2024.

REFRESHER- The USD hit a high of EGP 55.89 at the CBE on Sunday, days after crossing EGP 55 for the first time the preceding Thursday and eclipsing the previous peak of EGP 54.73 recorded on 7 April. By Tuesday, the USD had breached the EGP 56 mark.

MEANWHILE- An IMF mission arrived in Cairo Monday to start talks on the eighth and final review of our USD 8 bn Extended Fund Facility (EFF) and the last review under the Resilience and Sustainability Facility (RSF). That’s weeks ahead of the second half of November we had been told to expect last week. Clearing both reviews would unlock some USD 2.3 bn, with about USD 1.5 bn under the EFF and USD 800 mn under the RSF.

DEVELOPMENT-

The European Bank for Reconstruction and Development (EBRD) has committed up to USD 221 mn to a new platform that will hold stakes in Norwegian developer Scatec’s solar, wind, and battery storage projects in Egypt. Under a share purchase agreement, Scatec will own 60% of the platform and the EBRD 40%.

CAPITAL MARKETS-

Banque du Caire’s (BdC) retail book closed 27x covered. Retail investors had ordered some 9.29 bn shares by the close on Wednesday, against the 343.1 mn shares in the upsized public tranche. That’s roughly EGP 49.2 bn (c. USD 921 mn) chasing EGP 1.8 bn (c. USD 34 mn) of stock at the EGP 5.30 final price. The book is allocated pro rata and without discretion, so applicants got about 3.7% of what they asked for.

ALSO- Enppi eyes a January IPO, priced in USD: The government is aiming to launch the IPO of state-owned petroleum engineering contractor Enppi in the second half of January, with the offering priced in USD. The state will likely sell 10-20% of the company, leaving EGPC, which holds 96.61%, with roughly 77-87%. Work on the fair value study has been accelerated, and the USD price range will be set once it’s done.

PLUS- MNT-Halan’s EGP 4 bn post-IPO capital increase is fully paid, and it puts half of the IPO proceeds back inside the listed company. Parent MNT Investments BV subscribed to 163.27 mn new shares in MNT Tech Holding for Financial Investments at the EGP 24.50 offer price, lifting issued capital to EGP 176.3 mn from EGP 160 mn and the share count to 1.76 bn from 1.6 bn.

AND- Our investment fund industry crossed EGP 500 bn in 3Q 2026. The Financial Regulatory Authority published the milestone on Sunday, the same day the EGX70 lost 11.07% of its value in a single session. Net asset value rose 7.16% q-o-q to EGP 504.71 bn from EGP 470.97 bn, and assets under management climbed 7.27% to EGP 512.84 bn, with eight new funds taking the total to 232.

ENERGY-

The Oil Ministry plans to import about 15 mn barrels of crude in 4Q 2026, 8% more than a year earlier, and pay for it through supplier credit. The shipments will cost USD 1.4-1.5 bn as regional tensions keep oil prices high, which works out to roughly USD 93-100 a barrel, by our math.

AND- Two of the country’s biggest solar-and-battery projects moved forward this week at very different stages. Contractors at Nefer Minya have started full construction, while Dandara (whose power purchase agreement was signed in March 2025) is still signing preliminary financing terms.

STARTUPS-

Cairo-based solar and water startup NoorNation closed a USD 1.05 mn seed round backed by agribusiness group Linah Farms, Africa-focused climate tech investor Catalyst Fund, and Saudi VC firm KBW Ventures. Linah signed on after nine months of due diligence, turning one of NoorNation’s biggest clients into a shareholder.

MAJOR HEADLINES THIS WEEK-

Ukrainian President Volodymyr Zelenskyy said Kyiv is ready to join trilateral technical talks with the US and Russia, citing an energy ceasefire, Black Sea maritime and grain security, and an all-for-all prisoner swap as top priorities. The announcement followed his Russian counterpart Vladimir Putin signaling interest in three-way negotiations during talks with US envoy Steve Witkoff in St. Petersburg.

By Wednesday, Washington was floating business incentives for both sides: a return of US energy companies to an offshore project near Sakhalin, a resumption of Russian oil exports to Europe via the Druzhba pipeline, reopened Russian airspace for US airlines, and joint work on titanium. Ukraine would get a plan to attract long-term investment.

The US wants to advance the package at tripartite talks in Abu Dhabi next month, the first since February, though officials stress nothing proceeds while the war continues. Europe is split over its own role. The leaders of Finland, Norway, and Russia held a 90-minute call, originally planned for 20 minutes, that Denmark’s Prime Minister Mette Frederiksen said was “not coordinated with the rest of us.” Sweden’s Prime Minister Ulf Kristersson warned that going solo risks fracturing Europe’s voice.

Separately, Ukraine said Starlink and Starshield are back at full capacity after a disruption that strained ties with Washington. Elon Musk said Ukraine breached the terms of service by using the network for offensive drone attacks.

IN BRAZIL- Luiz Inácio Lula da Silva secured a fourth term with 51.8% of the vote, beating right-wing challenger Flávio Bolsonaro. The result is a setback for US President Donald Trump, who backed Bolsonaro, and promises continued friction between Washington and Latin America’s largest economy.

IN EUROPE- Protests continued across France, Albania, Italy, Spain, and Portugal over pensions, housing, education, and corruption, despite tighter security. France offered students concessions to end weeks of unrest, including up to EUR 4 bn in loans for school renovations, 15k extra higher education places, 500 new teaching jobs, and a replacement for the Parcoursup admissions platform by 2028. More demonstrations are planned, and much of the package falls to President Emmanuel Macron’s successor after next year’s election.

In London, Prime Minister Andy Burnham said he wants the UK back in the EU in his lifetime but ruled out reversing Brexit in this parliament. The EU, meanwhile, is preparing to cut imports of Chinese chemicals, furniture, and machinery, possibly through caps or tariffs as soon as 1Q 2027, to narrow a USD 404 bn trade deficit without triggering retaliation.

IN THE BUSINESS PRESS- Microsoft is offering voluntary buyouts to around 60k employees, about 27% of its 223k workforce, to help pay for its AI infrastructure push. And Polar LNG’s former CEO Joel Riddle accused Russia’s Novatek of secretly funding the USD 25 bn US gas export venture, which is repurposing an Alaska terminal Novatek partly built. Novatek is under US sanctions, and Riddle was among the leadership team that resigned in September over sanctions risk. On Thursday, Alphabet shares fell 10% in premarket trading following the tech giant’s disappointing 3Q earnings report.