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Analysts in a Reuters poll expected the Central Bank of Egypt to keep interest rates unchanged next Thursday for the sixth consecutive time, as the impact of the pound's drop to a record low, rising energy prices, and escalating regional conflict outweighs the effect of slowing inflation.
All thirteen analysts polled between October 22 and 27 expected the Central Bank of Egypt to keep the overnight deposit interest rate at 19% and the overnight lending rate at 20%.
The bank had cut interest rates by a total of 825 basis points between April 2025 and February, but paused after the US-Israeli war on Iran led to rising energy prices and increased inflation risks.
On Monday, the Egyptian pound recorded its lowest level at more than 56 against the dollar.
James Swanston of Barclays Bank said inflation remains above target, and that regional escalation and the depreciation of the pound in the past few weeks call for keeping interest rates unchanged once again.
Annual urban inflation slowed to 13.9% in August from 14.5% in August, but prices rose 1.3% on a monthly basis. Core inflation slowed to 14.1% from 14.9%.
Jamil Naim from S&P Global Market Intelligence said consumer prices are likely to remain under pressure amid rising energy prices and the fallout from regional tensions.
The central bank is expected to resume interest rate cuts at its final meeting of the year in December, pending inflation forecasts and external price pressures.
The central bank said in its meeting held on September 24 that its tight monetary policy is sufficient to maintain the downward path of inflation, and that it is ready to use all available tools.
The bank expects inflation to reach its target of 7%, plus or minus two percentage points, in the second half of 2027.
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