Egypt: Central Bank of Egypt raises rates to 20% in first hike since March 2024

The Central Bank of Egypt raised its key interest rates on 29 October 2026, lifting them by 100 basis points in its first increase since March 2024, with the overnight deposit rate moving from 19% to 20%, the overnight lending rate from 20% to 21%, and the main operation and discount rates both to 20.5%.

Why the bank raised rates

The decision surprised analysts, since a Reuters poll of 13 had expected a sixth consecutive hold after a 100 basis point cut in February 2026 and holds in April, May, July, August and September. The bank said it acted amid challenging external conditions and elevated uncertainty, to keep inflation expectations anchored and safeguard the downward path of inflation.

The latest inflation figures had eased, which makes the timing worth stating plainly: annual urban inflation slowed to 13.9% in September, from 14.5% in August, and core inflation fell to 14.1% from 14.9%. The pressure came from the currency instead. The Egyptian pound hit a record low of 56 per US dollar on Monday 26 October, the same day foreign and Arab investors recorded net sales of about $664 million in Treasury bills and bonds, according to Egyptian press reports of the decision.

What it means for borrowers and savers

The change reaches households and businesses through bank rates, and borrowers with variable-rate loans face higher repayments when banks pass the higher lending rate on, while loans on a fixed rate do not change until the fixed period ends. Deposit rates tend to move in the same direction as the policy rate over time, but each bank sets its own rates, so the effect on savers is not automatic or uniform.

What happens next

The bank said growth will remain broadly stable in the third quarter of 2026, near the 4.7% recorded in the second quarter, and that its next assessment will depend on inflation data, economic activity, and domestic and international financial developments. The committee holds its last meeting of the year on 17 December 2026.