Egypt Slashes Benchmark Rates to Stimulate Investment ...Egypt

In a decisive policy shift, the Central Bank of Egypt slashed its benchmark interest rate by 225 basis points in April, marking the first rate cut in more than five years. The move brings the overnight deposit rate to 25 percent and the lending rate to 26 percent, ending a prolonged period of record-high borrowing costs aimed at curbing inflation and supporting the Egyptian pound amid external shocks and currency devaluations.  The rate reduction follows nearly a year of stringent monetary tightening and comes amid growing public discontent over the unrelenting rise in living expenses. The central bank’s policy shift follows a notable decline in inflation. Headline inflation dropped to 13.6 percent in March, while core inflation hit a three-year low at 9.4 percent, a sharp turnaround from the record 38 percent inflation seen in September 2023.  According to the Central Bank, “the move aligns with upholding the appropriate monetary stance, with the aim of anchoring inflation expectations and safeguarding the projected disinflation path.” Despite progress, inflation remains well above the bank’s 7 percent target, and experts say the rate cut probably would not lower everyday goods in the short…

Egypt Slashes Benchmark Rates to Stimulate Investment first appeared on Egyptian Streets.

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