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Investing.com -- Egypt’s central bank cut interest rates by 200 basis points on Thursday, marking the first reduction since May as it aims to stimulate investment and reduce debt-servicing costs.
The Monetary Policy Committee lowered the benchmark deposit rate to 22% and the lending rate to 23%, according to a statement from the Central Bank of Egypt (CBE).
The decision reflects the bank’s updated assessment of inflation dynamics, which show annual headline inflation decelerating to 13.9% in July 2025, down from 14.9% in June. Core inflation remained relatively stable at 11.6% in July compared to 11.4% in June.
Egypt’s economy has shown signs of improvement, with CBE projections indicating real economic activity expanded by 5.4% in Q2 2025. The central bank forecasts average growth of 4.5% for the fiscal year 2024/25, up from 2.4% in FY 2023/24.
The unemployment rate declined to 6.1% in Q2 2025 from 6.3% in the previous quarter, further supporting the case for monetary easing.
The CBE expects inflation to continue easing, with an average ranging between 14% and 15% in 2025. The bank projects inflation will converge toward its target range by Q4 2026, aiming for 7% (±2 percentage points) and 5% (±2 percentage points) by Q4 2028.
The committee stated it would reassess the scale and pace of monetary easing on a meeting-by-meeting basis, guided by incoming data and the balance of risks. The central bank remains ready to adjust policy instruments as needed to fulfill its price stability mandate.
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