The Monetary Policy Committee (MPC) of the CBE made the announcement following its meeting on Thursday.
The CBE also cut the discount rate to 21.50 percent.
This decision, the fourth cut the CBE has introduced to the interest rates this year, reflects the Committee’s updated assessment of inflation dynamics and outlook since the previous MPC meeting.
Since the start of 2025, the CBE has introduced four cuts in 2025, being the total reduction to 6.25 percent (6.25 bps).
The committee said the move reflects its updated assessment of inflation dynamics, noting that headline inflation decelerated to 12 percent in August 2025 from 13.9 percent in July, while core inflation slowed to 10.7 percent from 11.6 percent.
The easing trend was driven by falling food prices and relative stability in non-food categories.
Real GDP growth also accelerated to 5 percent in 2Q 2025, up from 4.8 percent in the previous quarter, with non-petroleum manufacturing, tourism, and trade leading the expansion.
For FY 2024/25, GDP growth averaged 4.4 percent, almost double the 2.4 percent recorded the previous year.
Looking ahead, the CBE projects inflation to average between 12 and 13 percent in 3Q 2025, down from 15.2 percent in the previous quarter, with a further decline expected over the medium term.
Headline inflation is forecast to average around 14 percent in 2025 before converging to the CBE’s target range of 7 percent (±2 p.p.) in 4Q 2026, and 5 percent (±2 p.p.) in 4Q 2028.
Globally, the MPC noted, growth continues to recover and inflation expectations remain broadly stable, though risks persist from geopolitical tensions, commodity price shifts, and fiscal measures.
The committee stressed that future decisions on the pace and magnitude of monetary easing will be made on a meeting-by-meeting basis, depending on data and risk assessments, to safeguard price stability and anchor inflation expectations.
Egypt has recently launched its new economic model titled “Egypt’s Narrative for Economic Development”, which sets a seven percent real GDP growth by 2030.
The annual meetings of the World Bank Group and the International Monetary Fund (IMF) is scheduled to kick off on 13 October.
The Egyptian delegation to the meetings is expected to showcase the latest economic developments, including the new GCC investments that have been recently pledged to the country and the strong performance of the key macroeconomic indices attained in the FY2024/2025.
The IMF is expected to initiate on-the-ground discussions with the Egyptian authorities regarding the completion of the fifth and sixth reviews of the $8 billion loan agreement during the fall, along with talks on the first review of the newly approved Resilience and Sustainability Facility (RSF) loan of $1.3 billion.
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