Egypt's central bank expected to hold rates for sixth straight meeting

what happened

The Monetary Policy Committee of the Central Bank of Egypt meets on Thursday for its seventh scheduled session this year. Most forecasters expect rates to stay where they are for a sixth consecutive time. At the last meeting on 24 September, the overnight deposit rate was held at 19%, the overnight lending rate at 20%, and the main operation and discount rates at 19.5%.

The central bank said annual core inflation fell to 14.1% in September from 14.9% in August. The statistics agency CAPMAS reported that annual urban inflation eased to 13.9%, while monthly price growth picked up to 1.3% on higher vegetable and food costs. The bank also warned that risks to its inflation outlook remain tilted to the upside because of renewed regional hostilities.

Eleven financial institutions and investment banks surveyed by Asharq Bloomberg expect a pause. They point to higher global oil and commodity prices and the pound's slide to record lows against the dollar. Banking expert Mohamed Abdel Aal also sees a wait-and-see approach as most likely, with a hike or a cut considered unlikely.

why it matters

For markets, the key point is that Egypt appears set to close the brief easing phase that began in February with a one-percentage-point cut. A weak pound and expensive oil raise the risk of renewed inflation and possible tightening, while slowing inflation leaves room for a pause.

market impact

Egyptian pound and bonds: a hold with a weak pound supports rates, but the risk of tightening remains

• ↔Egyptian pound mixed — holding rates supports the currency, but its slide to record lows adds pressure

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