Cairo, Dec 26 – Egypt’s central bank delivered its fifth interest-rate cut of the year on Thursday, moving to support economic activity after inflation slowed more than expected.
The Central Bank of Egypt reduced its benchmark deposit rate by 100 basis points to 20 percent, while cutting the lending rate by the same margin to 21 percent, according to a statement published on its official Facebook page.
The move follows recent data showing a surprise deceleration in inflation, easing pressure on policymakers who had maintained tight monetary conditions to stabilise prices and the currency after last year’s inflation surge.
The latest cut signals a resumption of Egypt’s easing cycle after authorities paused earlier in the year to assess the impact of prior reductions. Inflation had previously constrained policymakers, forcing a cautious approach amid currency volatility and external financing pressures.
The central bank has been gradually shifting its stance as price pressures moderate, foreign currency inflows improve and financial conditions stabilise under Egypt’s ongoing reform programme backed by the International Monetary Fund.
While borrowing costs remain elevated by historical standards, the cumulative cuts this year reflect growing confidence that inflation is on a sustained downward path, allowing monetary policy to pivot toward supporting growth.
