Egypt Holds Rates at Record High Amid Global Uncertainty

AFRICAN STOCKS AND FINANCEFebruary 21, 2025 at 11:27 AM UTC

TLDR

Egypt’s central bank kept its benchmark interest rates unchanged for the seventh consecutive time
The bank cited economic uncertainty from U.S. protectionist policies and regional geopolitical risks
Inflation has been slowing, with headline inflation at 24% in January 2025, down from a record 38% in September 2023

Egypt’s central bank kept its benchmark interest rates unchanged for the seventh consecutive time, citing economic uncertainty from U.S. protectionist policies and regional geopolitical risks.

The deposit rate remains at 27.25%, while the lending rate stays at 28.25%, in line with expectations from most economists surveyed by Bloomberg. The decision comes as Egypt manages inflation risks and monitors economic recovery.

Domestic economic activity accelerated in Q4 2024, led by manufacturing and transportation, while unemployment fell to 6.4% from 6.7% the previous quarter. Inflation has been slowing, with headline inflation at 24% in January 2025, down from a record 38% in September 2023.

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Key Takeaways

Egypt’s monetary policy remains cautious as the central bank weighs the impact of global trade tensions and fiscal adjustments. Inflation is expected to decline significantly in 2025, but non-food inflation remains persistent at 25.5% on average. The central bank will assess the timing of potential rate cuts on a meeting-by-meeting basis. With economic growth improving and inflation stabilizing, policymakers may consider easing later in 2025 if external risks subside.

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Inflation

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