Standard Chartered no longer expects the Central Bank of Egypt (CBE) to begin cutting interest rates this Thursday, forecasting instead that the Monetary Policy Committee will keep rates unchanged and start its easing cycle with a 200-bps rate cut in May. That’s a shift from the bank’s previous forecast of a 150-bps cut at this week’s meeting, Standard Chartered MENA economist Carla Slim said at a presser attended by EnterpriseAM.

With recent foreign outflows from Egypt’s debt markets, Slim expects the CBE to remain conservative. “Outflows seem relatively manageable when looking at the interbank market, where volumes rose to a cumulative USD 3 bn,” Slim said, adding this does not mean outflows hit USD 1 bn, but it provides an indication of recent activity. The lender expects this wave of hot money to reverse course soon.

And even with mounting pressures, Standard Chartered expects Egypt’s economy to grow at a 4.5-6% clip by the end of 2026. Inflation is seen cooling to an average of 10-15% in 2025 — even as energy subsidies are phased out — before reaching the target of 7% ±2 percentage points by 2026. As for the EGP, the bank ruled out a new float in the short term and expects the exchange rate to weaken slightly to EGP 52 against the greenback by the end of this year, and to EGP 54 a piece by the end of 2026

Slim believes the MENA region is in a “very unique position” compared to the rest of the world when it comes to tariffs, with Gulf-Asia trade ties expected to cushion the impact of US tariffs — potentially even fueling a regional growth bump. The impact of US tariffs on MENA trade is expected to be limited over the next three months, as the decision coincides with OPEC’s move to ramp up oil production. The region exports an estimated USD 50 bn worth of goods to the US — half of which are petroleum products that were excluded from the new tariff regime.

That said, the bank sees three key indirect risks to MENA economies stemming from the tariff war:

  • Oil prices could fall further amid rising production, which would hit GCC economies — with the exception of Qatar, the UAE, and Oman, which are expected to remain relatively resilient.
  • Massive Gulf pledges to the US could come at a cost, as Gulf sovereign investors have committed some USD 1.4 tn from the UAE and another USD 1 tn from Saudi Arabia to invest in the US — which could divert capital away from local and regional development, especially given softening oil revenues.
  • While emerging-market currencies typically weaken under tariff pressure, the opposite has happened. This relative strength could support EM economies in the short term.

The lender is doubling down on green, infrastructure financing in Egypt. Mobilizing financing from banks and multilateral development institutions is one of Standard Chartered’s core roles in Egypt, particularly to support capital spending, infrastructure, public utilities, digital transformation, and green projects, Standard Chartered Egypt CEO Mohammed Gad said. The bank is leveraging its global network of sovereign clients and institutions to channel investments into the Egyptian economy and facilitate trade, he added.

Egypt’s green transition offers room to grow. With the government targeting a 35-40% share for renewables in the country’s energy mix within the next decade — up from 7-8% currently — Gad said Standard Chartered sees strong potential to ramp up green financing in the country. The bank has already helped secure USD 2 bn to support the Suez Canal Economic Zone’s ambition to become a regional hub for green hydrogen, he added.

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