Egypt's Central Bank Cuts 200 Basis Point Interest Rate Amid Cooling Inflation & Economic Growth
Egypt's Central Bank Cuts 200 Basis Point Interest Rate Amid Cooling Inflation & Economic Growth
The decision, which set deposit and lending rates at 22% and 23% respectively, reinforces the government's focus on economic expansion.
Headline inflation, after peaking at 38% in September 2023, has continued its downward trend, reaching 13.9% in July, according to the state statistics agency CAPMAS. The central bank projects this decline will continue for at least the next year.
According to the bank's Monetary Policy Committee, Q2 economic growth reached a preliminary 5.4%, up from 4.8% in Q1, driven by:
🟠increased tourism,
🟠manufacturing.
This positive economic momentum has encouraged the government to take proactive steps, such as cutting interest rates.
The Egyptian government also pledged to attract increased Gulf investments to maintain downward pressure on inflation, a key element in recovering from a prolonged foreign currency shortage that necessitated an $8 billion IMF loan.
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