The Monetary Policy Committee of the Central Bank of Egypt meets on Thursday 20 August 2026, its fifth gathering of the year, and most analysts and research houses expect it to leave interest rates unchanged for a fourth consecutive meeting. Renewed inflationary pressure has narrowed the room to resume the easing cycle that began in February.
Inflation turns back up
Headline inflation rose to 13% year on year in July from 12.2% in June, according to the Central Agency for Public Mobilization and Statistics. Urban inflation climbed to 14.9% from 14.3%. Both readings sit well above the central bank’s stated target of 7%, with a tolerance band of two percentage points either side.
Adding to the pressure, the electricity ministry approved an average 12% increase in household tariffs, leaving prices frozen only for the lowest bracket of consumers using no more than 50 kilowatt-hours a month. The increase is expected to feed into inflation readings over the coming months.
Where policy stands
The committee cut rates by 100 basis points in February and has held them steady at its April, May and July meetings. The overnight deposit rate stands at 19% and the overnight lending rate at 20%, while the main operation rate and the discount rate are both at 19.5%. February also brought a cut in the required reserve ratio, from 18% to 16%.
The analyst view
Mohamed Abu Basha, head of macroeconomic analysis at EFG Hermes, describes the bank as taking a wait-and-see approach while it tracks inflation, geopolitical developments and energy prices. Banking expert Hani Abou El Fotouh expects a hold, pointing to how sensitive capital flows are to any rapid cut, while banking expert Mohamed Abdel Aal argues that a single high inflation print will not move the committee, and that the increase is limited and tied to base-year effects.
Mahmoud Naglah, executive director for money markets at Al Ahly Investments, says current rate levels remain attractive and help absorb excess liquidity. Banking expert Ayman Soliman attributes the pickup in inflation to higher costs rather than stronger demand, and expects holds to continue through the September and October meetings.
Beyond August
Morgan Stanley expects rates to stay on hold with scope for a 200 basis point cut in the fourth quarter. S&P Global says faster inflation may delay the resumption of cuts, and Franklin Templeton points to higher energy prices as a reason for continued caution. The International Monetary Fund, by contrast, holds that the central bank needs to raise rates to finish bringing inflation down. Analyst Ali Metwally expects cuts of 200 to 300 basis points as the year closes, arguing the case for higher rates has faded.
Four of this year’s eight scheduled meetings remain: 20 August, 24 September, 29 October and 17 December.
This story was produced in the newsroom from the disclosed sources named above.
