Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Iranian Foreign Ministry spokesperson: No new date or venue has been set for the meeting between Araghchi and Witkoff, and no negotiations will take place until the outcome is guaranteed
Palestinian platforms: Settlers storm Al-Aqsa Mosque complex under the protection of the occupation police
Palestinian platforms: The IOF detonated a booby-trapped robot east of the al-Zaytoun neighborhood, south of Gaza City
Syrian Defense: We call on all parties in Sweida to cooperate with security forces and exercise restraint
Al Mayadeen's correspondent: The Lebanese Army is continuing its investigations and will later announce any information that does not affect the confidentiality of the investigation
Al Mayadeen's correspondent: It has not yet been determined whether the detainees belong to ISIS or another organization
Al Mayadeen's correspondent: Around 10 people of different nationalities, including Lebanese nationals, were detained
Al Mayadeen's correspondent: The Lebanese army arrested a number of people in the Matn area of Mount Lebanon with possession it has not disclosed
Gaza Civil Defense spokesman: We have strong indications that there are martyrs, injuries, and trapped people in the Salah al-Din area
Gaza Civil Defense spokesman: Citizens should avoid Salah al-Din Street because anyone who approaches it is at risk of being directly targeted

Egypt poised for another interest rate cut ahead of economic reforms

  • By Al Mayadeen English
  • Source: Bloomberg
  • 22 May 2025 13:14
3 Min Read

Egypt’s central bank is expected to cut interest rates again, easing record-high borrowing costs ahead of new economic reforms. Inflation remains below its 2023 peak, supporting policy flexibility.

Listen
  • x
  • Egyptians walk past an exchange office in Cairo, Egypt, Wednesday, March 6, 2024. (AP)
    Egyptians walk past an exchange office in Cairo, Egypt, Wednesday, March 6, 2024. (AP)

Egypt is expected to implement another interest rate cut before the summer, as policymakers balance inflationary risks with the need to stimulate investment and reduce debt-servicing costs.

Despite a slight uptick in inflation over the past two months, the country’s real interest rate, now around 11%, remains one of the highest in the world.

This wide real rate gap gives the Central Bank of Egypt room to reduce its benchmark deposit rate, currently at 25%. Nine economists in a Bloomberg survey all anticipated a rate cut on Thursday, with forecasts ranging from 150 to 300 basis points.

The anticipated move would be Egypt’s second monetary easing this year, following April’s historic cut, its first in five years. That easing followed a 40% devaluation of the Egyptian pound and a record 6-percentage-point rate hike earlier in 2024.

Simon Williams, economist at HSBC for Central and Eastern Europe, the Middle East, and Africa, noted that "it would be a missed opportunity to not cut again now." He pointed to weak growth, tight fiscal policy, and currency stability as reasons the central bank can afford to ease further, according to Bloomberg.

Related News

World Bank: Global growth to slow sharply, worst since 2008

Japan farm minister resigns over free rice remarks amid rising costs

Supporting growth, easing debt burden

A rate cut could help Egypt manage some of the highest debt-servicing costs in the Middle East while encouraging much-needed investment. The policy decision comes in the wake of a broad economic reform agenda backed by an $8 billion loan package from the International Monetary Fund (IMF).

The IMF deal, secured last year, aims to stabilize government finances through structural reforms and subsidy cuts. These reforms are set to intensify in the next fiscal year, beginning in July, when authorities are expected to revise value-added tax rates and possibly raise fuel prices again.

Inflation in Egypt accelerated slightly to 13.9% in April, driven in part by recent fuel price increases. However, this remains far below the September 2023 peak of 38%. Mohamed Abu Basha, head of research at Cairo-based EFG Hermes, said there were “no signs of aggressive pass-through” from recent subsidy cuts, indicating subdued consumer price pressure, according to Bloomberg.

Abu Basha added it is "plausible" the central bank will cut rates this week, then hold steady during its July and August meetings, coinciding with the early months of the new fiscal year.

In its April statement, the Central Bank of Egypt projected a continued decline in inflation through this year and into the next. It reaffirmed a target of 7%, plus or minus two percentage points, by the end of 2026.

However, the IMF has cautioned Egyptian authorities to remain "vigilant" in easing rates, citing global uncertainty and inflationary pressures stemming from events such as the US-China trade tensions and regional instability.

Economists expect Egypt to reduce rates by a cumulative 600 to 800 basis points over the course of 2024, executed in gradual stages.

  • economic crisis
  • economic reform
  • Egypt
  • IMF
  • IMF loan
  • Egypt economy

Most Read

Hezbollah SG reveals war details on Al Mayadeen for the first time

Hezbollah SG reveals war details on Al Mayadeen for the first time

  • Politics
  • 8 Jul 2025
Major ambush in Gaza kills 6 Israeli troops, injures dozens

Major ambush in Gaza kills 5 Israeli troops, injures 14

  • Politics
  • 8 Jul 2025
Israeli soldiers are seen in Beit Hanoun ahead of an operation by the al-Qassam Brigades, undated (Al-Qassam Brigades Military Media)

'Israel' on blast as media exposes report discrepancies in Gaza ambush

  • Palestine
  • 8 Jul 2025
Yemen Navy sinks ETERNITY C ship, shares footage of operation

Yemen Navy sinks ETERNITY C ship, shares footage of operation

  • Politics
  • 9 Jul 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
The Freedom Flotilla ship Handala as it departs for Gaza, where it aims to break the maritime blockade at a port in Syracuse, Sicily in southern Italy on July 13, 2025. (AFP)
Palestine

Freedom Flotilla's Handala departs Sicily in bid to break Gaza siege

The container ship CMA CGM Laperouse, left, docks at the Georgia Ports Authority's Port of Savannah, Sept. 29, 2021, in Savannah, Ga (AP)
Politics

US shipbuilding woes deepen as tariffs, outdated policies backfire

Gaza war raises ethical questions for ex-Obama, Biden officials
Politics

Mercenary firm tied to Gaza war crimes hires Obama-Biden PR operatives

'Israel' targets children in Gaza collecting water
Palestine

'Israel' strikes Gaza kids fetching water, blames it on 'malfunction'

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS