The Central Bank of Egypt (CBE) announced a 100-basis-point cut to its key policy rates, citing current inflation trends and evolving economic conditions.
The overnight deposit rate was reduced to 19%, the overnight lending rate to 20%, and the main operation rate to 19.5%, while the discount rate was also lowered to 19.5%.
In addition, the CBE Board of Directors reduced the required reserve ratio for commercial banks from 18% to 16% to support liquidity and encourage lending.
The rate decision follows data showing a slowdown in inflation. The CBE reported that annual core inflation fell to 11.2% in January 2026 from 11.8% in December, with the monthly change in the core consumer price index rising 1.2% versus 0.2% in December.
Meanwhile, the Central Agency for Public Mobilization and Statistics said annual urban inflation declined to 11.9% in January from 12.3% in December, while nationwide annual inflation dropped to 10.1% from 10.3%. Monthly inflation rose to 1.5%, compared with 0.1% the previous month.
The central bank expects inflation to approach its target of 7%- ± 2%- on average by the last quarter of 2026, while noting that the pace of decline is still tempered by slow easing of non-food inflation, fiscal adjustment measures, and global geopolitical risks that could push inflation higher.