Egypt hikes interest rates for first time since 2024

Egypt's central bank has raised interest rates for the first time since 2024, amid mounting economic pressure and inflation driven by the Middle East conflict. The Central Bank of Egypt (CBE) increased the key policy rates by 100 basis points, raising the overnight deposit rate to 20.0%, the overnight lending rate to 21.0%, and the main operation rate to 20.5%.

This decision comes as the Egyptian pound hit a record low of 56 to the US dollar, underscoring the country's economic struggles. Inflation rose to approximately 14% year-on-year in October, up from 13% in September. The conflict has also affected shipping through Egypt's crucial Suez Canal, impacting foreign currency inflows. Egypt grapples with a severe economic crisis, exacerbated by mounting external debt and soaring global energy prices, with foreign minister Badr Abdelatty reporting a loss of nearly US$11 billion since 2023 due to reduced Suez Canal revenues.