Egypt Central Bank Cuts Interest Rates by 100 Basis Points Fourth Time in 2025 Amid Inflation Cooling and 5% GDP Growth

The Central Bank of Egypt (CBE) has implemented its fourth interest rate cut of 2025, reducing the overnight deposit rate to 21% and the overnight lending rate to 22%, reflecting growing confidence that inflationary pressures are sufficiently contained. Despite robust economic growth accelerating to 5% in the second quarter, output remains marginally below potential, which supports the continuation of monetary easing. This decision is part of a cumulative 400 basis points reduction in rates this year, signaling a gradual normalization of borrowing costs that were previously at emergency levels amid economic difficulties. The CBE's Monetary Policy Committee indicated that further rate cuts could be expected if economic conditions stay favorable, leveraging the stronger currency and low inflation not seen since 2022. These cuts aim to support ongoing economic activity while maintaining a disinflationary path. The move is consistent across multiple sources, underscoring a strategic monetary policy easing amid improving economic indicators in Egypt.