CAIRO, Aug 20 – Egypt’s central bank kept its benchmark interest rates unchanged for a fourth consecutive meeting, opting to maintain a cautious monetary policy stance as inflation accelerated and uncertainty surrounding the Iran war clouded the outlook.
The Central Bank of Egypt’s Monetary Policy Committee left the overnight deposit rate at 19% and the lending rate at 20%, according to a statement issued on Thursday.
The decision follows a period of renewed inflationary pressure. Egypt’s annual urban consumer inflation accelerated to 14.9% in July from 14.3% in June, according to data from the Central Agency for Public Mobilization and Statistics. Nationwide annual inflation also reached 13% during the month.
The latest rate decision indicates that policymakers remain focused on assessing whether the recent increase in inflation is temporary or could become more persistent before considering further monetary easing.
The external environment is adding another layer of uncertainty. Prospects for a swift end to the Iran war have weakened, potentially keeping energy and commodity markets volatile and complicating the inflation outlook for economies such as Egypt that remain sensitive to movements in global prices.
By maintaining borrowing costs at their current levels, the central bank is preserving its ability to respond to further inflationary pressure while avoiding an immediate change in financial conditions.
The decision also comes as Egypt continues to navigate broader economic challenges, including the need to maintain price stability while supporting economic activity and investment. Future policy decisions are likely to depend heavily on the direction of inflation, external market conditions and the broader trajectory of the economy.
