Egypt’s Central Bank Poised for Rate Cut Amid Easing Inflation, Surveys Show
Economists widely expect CBE to reduce borrowing costs by 50-200 basis points at final 2025 meeting.
Multiple surveys suggest the Central Bank of Egypt (CBE) is set to cut interest rates next Thursday by 50 to 200 basis points, with an average reduction of 100 points.
The CBE’s Monetary Policy Committee (MPC) is scheduled to hold its final meeting of 2025 on Thursday, December 25. This meeting follows a slight moderation in Egypt’s inflation rate, which eased to 12.3% in November from an annual 12.50% in October.
A Reuters poll of 14 economists, published Monday, indicated the Egyptian central bank is likely to cut interest rates by 100 basis points, bringing the deposit rate to 20% and the lending rate to 21%.
The same Reuters survey highlighted that Egypt’s real interest rates remain among the highest globally, even after the CBE implemented cumulative overnight rate cuts of approximately 625 basis points since the beginning of the year.
Ivan Borja, an analyst at the Institute of International Finance (IIF), commented that while “favorable inflation figures provide room for a rate cut,” upside risks to inflation persist, particularly with anticipated adjustments to electricity tariffs in early 2026.
Mohamed Abu Basha, an economist at EFG Hermes Holding, noted that November’s “positive inflation surprise” offers reassurance regarding potential shocks to rent and fuel prices.
Abu Basha further elaborated that November’s inflation figures specifically “show limited effects from the second round of the recent fuel price increases.”
Analysts at Emirates NBD’s economic research division also project a more aggressive stance, forecasting the CBE will cut interest rates by 200 basis points before the year’s end. This would bring the deposit rate to 19% and the lending rate to 20%.
Looking further ahead, Emirates NBD analysts anticipate the CBE will implement an additional 500 basis points in rate cuts throughout the upcoming year.
Separately, a CNBC poll involving 11 analysts and economists from local and international investment firms and banks also projected the CBE would reduce interest rates by 100 to 200 basis points on Thursday, citing the previous month’s decelerating inflation rates.
Ahmed Abu Al-Saad, CEO of Azimut Egypt Asset Management, also expects monetary policymakers to implement a 100-basis-point rate cut at the upcoming CBE meeting, citing the marginal decline in inflation readings.
Abu Al-Saad further projected that the CBE would enact a cumulative 500-basis-point reduction in interest rates across its meetings throughout 2026.
