FX.co ★ Egypt Cuts Rate 100 Bps, Nears 2-Year Low

On December 25, 2025, the Central Bank of Egypt reduced key interest rates by 100 basis points, signaling increased optimism regarding the alleviation of inflationary pressures following an extensive period of stringent monetary policy. This adjustment has brought the interest rate to its lowest point since January 2024. Recent data highlighted a decrease in annual inflation, which fell to 12.3% in November, compared to October's three-month peak of 12.5%. This decline was largely attributed to a moderation in food price increases, which rose by only 0.7% compared to 1.5% in October, marking the lowest rate of increase since April 2021. In addition to this, the Monetary Policy Committee reduced the overnight deposit rate to 20.0%, the overnight lending rate to 21.0%, and the main operation rate to 20.50%. Similarly, the discount rate was lowered to 20.50%. Over the past two years, Egypt has maintained high borrowing costs to curb inflation driven by currency devaluation, supply chain disruptions, and fiscal pressures.