Egypt’s central bank reduced its key overnight interest rates by 200 basis points on Thursday, in a sharper-than-expected move designed to stimulate growth as inflation continues to cool. The deposit rate now stands at 22%, while the lending rate has been lowered to 23%, Reuters disclosed.
The decision follows a steady decline in inflation, which eased to 13.9% in July, down from 14.9% in June, after peaking at nearly 38% in September 2023, the outlet detailed. Economic growth has also shown resilience, with GDP expanding 5.4% in Q2 2025, compared with 4.8% in Q1, driven largely by tourism and manufacturing, Reuters highlighted.
This marks the third rate cut of 2025, following a combined 325 basis points in April and May, signaling a pivot from crisis-era monetary tightening toward measures that support recovery. The central bank emphasized that with price pressures easing, it has more space to stimulate lending and private investment, the report noted.
Analysts suggest the move could lower borrowing costs for businesses and consumers while reinforcing investor confidence, especially as Egypt continues to attract Gulf-backed financing and foreign direct investment into key sectors, Reuters indicated.
