Arab Finance: The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided to keep its key policy rates unchanged on Thursday, May 21st, according to a press release.
Under the decision, the overnight deposit rate remains at 19%, while the overnight lending rate was maintained at 20%. The rate of the main operation and the discount rate were also kept at 19.50%.
Global economic activity continues to expand at a moderate pace, weighed down by ongoing geopolitical tensions, persistent trade policy uncertainty, and weak demand conditions.
In its reports, the committee highlighted that recent increases in inflation rates across several economies have pushed central banks worldwide to maintain cautious monetary policy stances.
Meanwhile, the CBE indicated that Egypt’s real gross domestic product (GDP) growth slowed to 5% in the first quarter (Q1) of 2026, compared to 5.3% in Q4 2025.
Economic activity is expected to further retreat during Q2 2026 due to the impact of the ongoing regional conflict.
Hence, the CBE projects real GDP growth to reach around 5% in fiscal year (FY) 2025/2026, with economic activity remaining below potential, although it is expected to converge toward full capacity by the first half (H1) of 2027.
The central bank recently revised its baseline inflation forecast upward, noting that Egypt’s annual headline inflation is projected to accelerate throughout the year before gradually moving downward by H2 of 2027, averaging 17% and 13% in 2026 and 2027, respectively.
In its April meeting, the MPC maintained key policy rates unchanged, citing prevailing inflation trends.
