CAIRO (Reuters) – Egypt’s central bank kept its overnight interest rates unchanged on Thursday, as expected, saying that while inflation was set to decelerate sharply in early 2025 it nonetheless remained high.
The bank’s monetary policy committee kept the lending rate at 28.25% and the deposit rate at 27.25%, it said in a statement.
The unanimous forecast in a Reuters poll of 12 analysts was that the committee would keep rates steady.
Egypt’s headline inflation dipped in November to 25.5%, its lowest since December 2022, and has been trending downwards from a record high of 38.0% in September 2023.
“Inflation is projected to ease substantially in 2025, as the cumulative impact of monetary policy tightening and favorable base effect materializes, with a notable decline in Q1 2025 and convergence to single digits by H2 2026,” the statement said.
It added that according to leading indicators, economic growth accelerated in the second half of 2024 from the 2.4% recorded in the second quarter.
“The committee judges that the current policy rates remain appropriate to maintain a tight monetary stance until a significant and sustained decline in inflation is achieved, and expectations are firmly anchored,” the statement said.
(Reporting by Ahmed Tolba and Yomna Ehab; writing by Patrick Werr; Editing by Louise Heavens and Alistair Bell)
