The Central Bank of Egypt's monetary policy committee opted to maintain interest rates at current levels on Thursday, marking the third consecutive meeting in which policy settings were left unchanged.
Policy rates were held with the benchmark deposit rate at 19% and the lending rate at 20%, according to the statement released by the central bank on Thursday. The decision matched expectations: all six economists surveyed by Bloomberg had forecast a hold.
Geopolitical backdrop and monetary stance
Authorities said uncertainty stemming from ongoing hostilities between the US and Iran has influenced the decision to pause further easing. The bank froze its nearly yearlong cycle of monetary easing when the US-Israeli war on Iran began in late February. Renewed strikes between the US and the Islamic Republic this week have reinforced doubts about the conflict reaching a definitive end, and policymakers noted the disruption the fighting has caused to energy markets.
Inflation readings
Recent official data provide a mixed picture on price pressures. The Central Agency for Public Mobilization and Statistics reported that monthly urban headline CPI recorded negative 0.4% in June 2026, compared with negative 0.1% in June 2025 and 1.6% in May 2026. On an annual basis, urban headline CPI inflation was 14.3% in June 2026, down slightly from 14.6% in May 2026.
Core inflation presented a different trajectory. Central Bank of Egypt figures showed monthly core CPI inflation at 0.3% in June 2026, compared with negative 0.2% in June 2025 and 1.6% in May 2026. Annual core CPI inflation rose to 14.3% in June 2026 from 13.8% in May 2026.
Implications and context
The decision to pause rate cuts reflects the central bank's cautious approach in an environment where geopolitical shocks have amplified uncertainty, particularly through effects on energy markets. The divergence between headline and core inflation metrics suggests that while some month-on-month price pressures eased, underlying inflation remained elevated on an annual basis.
What the statement did not change - The central bank did not alter the numerical policy rates and provided no new guidance beyond maintaining the current stance in light of external developments and recent inflation data.