Egypt’s central bank cut interest rates for the first time by 2.25 percent in over five years on Thursday, April 17, saying falling prices could lead to more cuts soon, according to an official statement.
The overnight deposit rate is now 25 percent, the overnight lending rate is 26 percent, and the main operation rate is 25.5 percent. The discount rate was also brought down and now matches the main operation rate at 25.5 percent.
These rates affect how much it costs for banks to borrow or lend money, and, in turn, they influence the interest rates people see when borrowing or saving money.
By lowering these rates, the Central Bank is trying to make borrowing cheaper, which can encourage people and businesses to take out loans and spend more money. This can help stimulate the economy, especially if inflation is low or under control.
Inflation declined significantly by approximately 9 percent in the first quarter of 2025, facilitating the Central Bank’s decision to begin lowering interest rates, as noted in the statement.
Inflation is projected to continue decreasing throughout 2025 and 2026, though the pace of this decline is expected to slow in comparison to the sharp drop observed in Q1 2025.
Egypt has been undertaking various reforms to stabilize its economy, which has led Standard & Poor’s (S&P), a leading global credit rating agency, to recently upgrade Egypt’s credit outlook from negative to stable.
S&P pointed to recent measures, such as a controlled currency devaluation, stricter monetary policies, and an expedited privatization program, which have helped improve investor confidence and create a more stable macroeconomic environment.
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