Egypt: first rate cut since 2020

The Central Bank of Egypt has just lowered its interest rates by 225 basis points, a first since November 2020.

The overnight deposit rate is now set at 25%, and the overnight lending rate at 26%. This decision marks a turning point after several years of ultra-restrictive monetary policy, against a backdrop of slowing inflation and efforts to boost growth.

After raising rates to record levels to contain the depreciation of the pound and curb inflation, the Central Bank is now seeking to ease the cost of credit and support investment, as the Egyptian economy faces persistent challenges.

This signal is expected by the markets, but remains cautious, given the country’s financial fragilities.

Source: CGNT