Egypt Monetary Policy May 2019


Egypt: Central Bank stands pat in May

May 23, 2019

The Central Bank of Egypt (CBE) left all interest rates unchanged at its monetary policy meeting on 23 May, as had been expected by most market analysts. Therefore, the overnight deposit rate remains at 15.75%, the overnight lending rate at 16.75% and the main operation rate at 16.25%. This comes after the CBE cut all rates by one percentage point on 14 February to support the domestic economy on the back of slowing inflation and weakening global economic momentum.

The CBE likely felt it did not have room to cut rates again in May as inflation remained above the target range and government fuel subsidy cuts—due to come into effect in June—could stoke inflationary pressures in the short-term. Moreover, the CBE noted that volatile oil prices pose risks to the inflation outlook. On the other hand, the Egyptian pound has appreciated noticeably since January, which should limit future inflationary pressures. Overall, though, the CBE captured its meeting when saying the “key policy rates remain appropriate at this juncture”.

Looking ahead, the Central Bank of Egypt is likely to hold interest rates steady in the short-term to support economic activity without risking stoking inflation. The CBE is likely to adopt a wait-and-see approach to see how the economy performs, how inflation reacts to government subsidy cuts and how the pound evolves in the foreign exchange market before deciding on its next widely expected interest rate cut. In terms of the foreign exchange market, a must-watch factor will be how the monetary policy of the United States develops, as a more dovish Fed could result in more demand for the pound from abroad, supporting the Egyptian currency. The next monetary policy meeting is scheduled for 11 July.

FocusEconomics Consensus Forecast panelists expect the overnight deposit rate to be cut further ahead, projecting the rate to end calendar year 2019 at 15.2% and calendar year 2020 at 13.6%.

Author:, Economist

Sample Report

Looking for forecasts related to Monetary Policy in Egypt? Download a sample report now.


Egypt Monetary Policy Chart

Egypt Monetary Policy May 2019 0

Note: Overnight Deposit Rate in %.
Source: Central Bank of Egypt (CBE).

Egypt Economic News

  • Egypt: Egypt PMI rebounds in May but remains in contraction territory

    June 3, 2020

    Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, rebounded to 40.7 in May from 29.7 in April, which had marked the lowest reading since the current survey began in April 2011 and reflected the effects of Egypt’s first full month with new social distancing measures in place aimed at reducing the spread of coronavirus.

    Read more

  • Egypt: Central Bank leaves rates unchanged at May meeting

    May 14, 2020

    At its scheduled monetary policy meeting 14 May, the Central Bank of Egypt (CBE) left the overnight deposit, overnight lending, and main operation rates unchanged at 9.25%, 10.25% and 9.75%, respectively.

    Read more

  • Egypt: Economic growth remains robust in October–December 2019

    May 11, 2020

    The economy expanded 5.6% year-on-year in the second quarter of FY 2020 (October–December 2019), which was unchanged from the growth rate of the first quarter. Private consumption growth accelerated to 2.7% in October–December (July–September: +1.0% year-on-year), seemingly supported by lower inflation and cuts to the overnight deposit rate by the Central Bank, and despite an uptick in the unemployment rate to 8.0% from 7.8%.

    Read more

  • Egypt: Inflation picks up in April

    May 10, 2020

    Consumer prices increased 1.3% in April compared to the previous month, up from the 0.6% increase in March and mainly due to a sharper increase in food and vegetable prices.

    Read more

  • Egypt: Non-oil private sector contracts at fastest pace on record in April

    May 5, 2020

    Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, fell to 29.7 in April, down from 44.2 in March and the lowest reading since the current survey began in April 2011.

    Read more

More news

Search form