CAIRO (Reuters) -Egypt’s central bank cut its key interest rates by 100 basis points on Thursday, its second reduction in 2025 after keeping rates steady for a year, citing easing inflation, unwinding trade tensions and current exchange rate dynamics.
The Monetary Policy Committee lowered the overnight deposit rate to 24% and the lending rate to 25%, confirming analysts’ expectations of an extended reduction that began in April as inflation remained relatively low.
The median forecast of 16 analysts was for the central bank to cut the deposit rate to 23.25% and the lending rate to 24.25%.
Headline inflation slowed to 13.9% in April, down sharply from a record high of 38% in September 2023, reflecting a sustained deceleration in price pressures.
The bank suggested there had been a “sustained recovery in economic activity” in the first three months of 2025 with real gross domestic product (GDP) growth projected at around 5%, compared with 4.3% in the final quarter of last year, it added in a statement.
The central bank had hiked rates by 600 bps in March 2024 as Egypt signed a loan agreement with the International Monetary Fund (IMF), part of a broader effort to stabilise the economy and contain inflation.
Money supply (M2) growth also decelerated, falling to an annual 25.8% at the end of March from 33.9% in February, according to central bank data.
(Reporting by Enas Alashray and Yomna Ehab; Writing by Tala Ramadan, Editing by William Maclean, Kirsten Donovan)
Comments