Egypt's Central Bank Monetary Policy Committee is expected to cut interest rates by 1-2% at its first 2026 meeting on Thursday. This comes amid core inflation easing to 11.2% in January. Experts support the move to boost economic growth while maintaining stability.
The Monetary Policy Committee of Egypt's Central Bank will hold its first 2026 meeting on Thursday to set key interest rates, with strong expectations of a 1-2% cut. At the prior meeting on December 25, 2025, the committee reduced rates by 1%, setting the overnight deposit rate at 20%, lending rate at 21%, and main operation rate at 20.5%.
The Central Bank reported annual core inflation fell to 11.2% in January 2026 from 11.8% in December 2025, while urban annual inflation dropped to 11.9% from 12.3%, and nationwide to 10.1% from 10.3%. The bank projects inflation nearing its 7% (±2%) target by the fourth quarter of 2026.
Banking expert Mohamed Abdel Aal noted opinions are split between those favoring steady rates amid regional risks and others supporting continuation of the easing cycle started in April 2025. He highlighted the pound's improved performance, foreign reserves at $52.5 billion, and banks' net foreign assets at $25.48 billion. "In my view, the balance tilts toward another cut based on comprehensive factors," he said.
Expert Shaimaa Wagih anticipates a 1-1.5% reduction, stating current high rates burden the private sector. HC Securities expects a 1.5-2% cut, with net international reserves at $52.6 billion in January. Analyst Heba Mounir remarked: "External stability allows a 150-200 basis point cut to support private activity."
A Reuters poll of 14 economists forecasts a 1% cut. The decision will be guided by inflation forecasts and surrounding risks.
