Egypt Raises Interest Rates to 20%
Egypt raised its key interest rates by one point to 20% and 21% on 29 October, a surprise move to keep inflation expectations anchored. The post Egypt Raises Interest Rates to 20% appeared first on The Rio Times .
On 29 October 2026, Egypt's central bank unexpectedly increased its main interest rates by one percentage point, marking a surprise move after five consecutive meetings without changes. The bank raised the overnight deposit rate from 19% to 20% and the overnight lending rate from 20% to 21%. Additionally, the main operation rate and discount rate, both guiding short-term bank funding, were increased by one point each to 20.5%.
The Monetary Policy Committee, responsible for setting Egypt's interest rates, announced the increase during their meeting on Thursday. The bank's decision aims to keep inflation expectations in check and protect the ongoing decline in inflation. External conditions and heightened uncertainty, including rising energy and commodity prices, were cited as factors contributing to the decision.
Despite urban inflation decreasing slightly in September 2026, it remains far higher than the central bank's target of 7%, currently sitting at 13.9%. The weakening Egyptian pound, trading below EGP 56 to the US dollar, adds to the pressure, making imported goods more expensive. The bank's move could help slow the currency's decline and limit imported price pressure by making pound deposits and bonds more attractive.
However, the higher rates may also lead to increased borrowing costs for companies and weigh on profits for indebted businesses. While the bank has not disclosed a roadmap for future rate adjustments, a stable pound and lower inflation in October could prompt a pause in further increases.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
