Key Points
- Egypt’s central bank keeps rates unchanged at 28.25%.
- Inflation is expected to drop significantly in early 2025.
- Economic growth rebounded in the second half of 2024.
Despite forecasts of a significant downturn in early 2025, Egypt’s central bank maintained its overnight interest rates Thursday, as anticipated, citing persistently high inflation.
Egypt’s central bank keeps rates steady despite inflation concerns
According to a statement from the central bank, the Monetary Policy Committee of the bank kept the loan rate at 28.25% and the deposit rate at 27.25%.
Twelve economists surveyed by Reuters unanimously predicted that rates would remain unchanged. After hitting a record 38% in September, headline inflation in Egypt dropped to 25.5% in November, its lowest level since December 2022.
“As the combined effects of monetary policy tightening and favorable base effects materialize, inflation is projected to ease substantially in 2025, with a notable decline in the first quarter of 2025 and a convergence to single digits by the second half of 2026,” the bank stated.
Economic growth shows improvement in late 2024
According to Reuters, the announcement also mentioned that, after growing by 2.4% in the second quarter of 2024, economic growth accelerated in the second half of the year.
“Until a substantial and sustained drop in inflation is achieved and inflation expectations are firmly anchored, the committee believes that the current policy rates remain appropriate to maintain a tight monetary stance,” the statement read.
