Egypt’s Central Bank Poised for Potential Interest Rate Cut โขAmid Cooling Inflation
Cairo, Egypt – september โ30, 2025 – Markets are keenly focused on the Monetary Policy Committee meeting atโ the Central Bankโฃ of Egyptโ (CBE) this thursday, as analysts debate the future โขof interest rates. While opinions diverge, a consensus is building that โฃthe CBE โฃmay continue its easing monetary policy, โbuoyed by positive economic developments and a sustained decline in inflation.
Since the beginning of the year, the CBE has โalready implemented three interest rate cuts, totaling 5.25% – the first reductions in fourโ and a half years. This proactive approach โaims to stimulate economic growth and attractโฃ investment following a period of relative inflation control and exchange rateโ stabilization.
Inflation Trends Point to Further Easing
recent data reinforces the possibility of further cuts. Annual urbanโ inflation fell for the third consecutive monthโ in August, dropping to 12% from 13.9% in July. This downward trend is providingโข the CBE with โคincreased flexibility in its monetary โpolicy decisions.
expertโข opinions Converge on Potential Reduction
Leading economists are predicting a furtherโข reduction โคin interest rates atโฃ this week’s meeting.
Sahar Al-Damati, a banking expert and former deputy head of the Bank ofโค Egypt, anticipates a cut of between 1% andโ 1.5% โif inflation continues on its currentโ trajectory. she estimates a total reduction of approximately 2% โacross the โremaining โคthree โmeetings of the year. Al-Damatiโ believes that increased dollar liquidity andโค the recovery of key sectorsโฃ like tourism and exports will strengthen the Egyptian pound, โproviding the CBE with greater maneuvering room.
Prime Minister Dr. Mustafa Madbouly echoed this sentiment last week, suggesting that any anticipated fuel price increases would have a limited impact on inflation.โค He emphasized the government’s commitment to partially subsidizing diesel, recognizing its crucial role in agriculture, logistics, and industry.
Economist Ahmed Moati also predicts a 1% to โฃ2% โคrate cut, citing the expected limited impact of potential fuel priceโ increases – potentiallyโ only 2% to 3% -โ andโ the offsetting effectโข of a slight strengthening of the Egyptian pound against the dollar (around 1% toโค 2%). โ Moatiโ forecasts that inflation willโค stabilize around the โCBE’sโค official target of 7%, withโ a margin โof error of plusโค orโข minus 2%.
Mustafa Shafi’i, โคhead of Research at an Arab Online Company, believes the Octoberโข meeting โขrepresents a crucial windowโข for further easing. He points to rising expatriate investments and stable โexternal economic conditions as โคsupporting factors,โ predicting a potential rate reduction โof 1% โคto 2%.
Looking Ahead
The CBE’sโ decision this Thursday will be closely watched by investors and businesses โฃalike. A continued easing of monetaryโข policy could provide a meaningful boost toโฃ economic activity, whileโฃ maintaining price โฃstability remains โขa key priority.โข The central bank faces the delicate task of balancingโฃ these competing โคobjectives as Egypt navigates a period of economic transition.
Keywords: Egypt, Central Bank, Interest Rates, Inflation, Monetary Policy, Economy, CBE, Egyptian Pound,โฃ Investment, Fuel Prices, Economic Growth.
