Egypt’s central bank keeps key rates steady

Reuters/Shokry Hussien

The Central Bank of Egypt has kept its key interest rates steady as economic growth remains below potential.

The lending rate was unchanged at 28.25 percent, while the deposit rate remained at 27.25 percent, the monetary policy committee (MPC) said in a statement.

“Projections for Q4 2024 show that while economic activity continues to pick up, estimates indicate that real GDP remains below potential, thereby supporting the expected disinflation path over the short term,” the committee said.

While inflationary pressures are likely to persist near current levels through the remainder of 2024, risks remain on the upside.

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Key concerns include global geopolitical tensions, potential trade protectionism and a higher-than-expected impact of domestic fiscal measures.

Despite these challenges, inflation is projected to ease significantly starting in the first quarter of 2025 as the cumulative impact of monetary policy tightening materialises. 

Annual headline inflation held steady at 26.5 percent in October 2024 for the third consecutive month, primarily driven by higher prices for regulated non-food items, including liquefied petroleum gas and pharmaceuticals.