CAIRO (Reuters) – Egypt’s central bank lowered interest rates by 225 basis points on Thursday, its first cut since November 2020, a decision mostly driven by inflation plunging as uncertainty about the impact of U.S. tariffs on the global economy swirls.
The central bank set its lending rate at 26% and the deposit rate at 25%, in line with analysts’ expectations. The median forecast in a Reuters poll of 17 analysts on Monday was for the central bank to cut rates by 200 basis points.
The central bank kept its inflation target unchanged at 7% +/- 2 percentage points in Q4 2026.
The move also marked the first change in rates since March 6, 2024, when the central bank hiked rates by 600 basis points and sharply shaved the currency’s value against the dollar, measures taken as part of an $8 billion International Monetary Fund loan.
Headline inflation has been on a downward trend in recent months, more than halving from a record high of 38% in September 2023 to 13.6% in April, helped by a strong base effect.
(Reporting by Muhammad Al Gebaly and Ahmed Tolba; writing by Tala Ramadan and Nayera Abdallah; editing by Mark Heinrich and Diane Craft)
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