The changes follow Cabinet Resolution No. 1451 of 2022, which regulates the management and monitoring of low-interest financing initiatives.
According to the CBE, the interest rate for middle-income borrowers will now be 12 percent declining, up from eight percent declining, while the rate for low- and middle-income borrowers rises to eight percent declining, compared with three percent declining previously.
The bank stressed that the adjustments apply only to new loans issued from 15 October 2025 onward and do not affect existing loans.
Policy and Fiscal Context
The decision comes as the Ministry of Finance assumes full oversight of these initiatives, including implementation and performance monitoring as set under Egypt’s current Extended Fund Facility (EFF) loan programme with the International Monetary Fund (IMF).
The move aligns with the government’s strategy to control public spending, direct support to eligible groups, and balance social incentives with fiscal discipline.
The revision also addresses rising financing costs, particularly after the central bank’s repeated hikes in key policy rates over the past two years, which increased borrowing costs across sectors.
Raising rates was a bid to moderate demand for real estate loans in the short term, while reducing the fiscal burden of interest subsidies previously borne by the state.
The CBE emphasised that, despite the increase, the measure is part of a long-term strategy to maintain the sustainability of real estate financing programs amid high inflation and to ensure liquidity stability in the banking system.
The CBE highlighted ongoing cooperation with relevant stakeholders to offer diverse financing solutions that cater to the needs of middle- and low-income groups.
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