CAIRO, May 22 – The Central Bank of Egypt kept its benchmark interest rates unchanged on Thursday as policymakers weighed moderating inflation against rising risks linked to regional geopolitical tensions.
The bank’s monetary policy committee maintained the overnight deposit rate at 19% and the lending rate at 20%, in line with expectations from economists surveyed by Reuters.
The central bank said the decision reflected its assessment of current and expected inflation trends amid what it described as an “unfavorable external environment.”
Egypt’s annual urban consumer inflation slowed unexpectedly to 14.9% in April from 15.2% the previous month, although price growth remains significantly above the bank’s long-term target range of 5% to 9% by the fourth quarter of 2026.
Core inflation, which excludes volatile food and fuel prices, also eased slightly to 13.8% from 14% in March.
The central bank said economic growth moderated during the first quarter of 2026, with real gross domestic product expanding 5% compared with 5.3% in the previous quarter.
Policymakers warned that growth is expected to slow further during the second quarter because of the ongoing regional conflict and broader global uncertainty.
The decision comes as countries across the Middle East and Africa grapple with inflationary pressures tied to higher energy prices and disruptions linked to the conflict involving the United States, Israel and Iran.
The escalation has increased concerns over supply-chain disruptions and rising import costs, particularly for energy-importing economies such as Egypt.
Egypt remains under an $8 billion support programme with the International Monetary Fund as authorities continue implementing economic reforms aimed at stabilizing inflation, rebuilding foreign reserves and attracting investment.
The central bank’s cautious stance reflects efforts to preserve macroeconomic stability while avoiding additional pressure on economic growth and household consumption.
