FX.co ★ Egypt Cuts Rate by Less than Expected

In its May 2025 meeting, the Central Bank of Egypt reduced its benchmark overnight deposit rate by 100 basis points to 25%. This move represents the second consecutive rate cut, although it was less aggressive than market expectations, which anticipated a reduction between 125 and 300 basis points. These cuts are the first in five years and are intended to bolster economic growth, particularly as Egypt continues to be one of the world’s economies with the highest real interest rates. Nonetheless, there remains a cautious approach towards more significant rate cuts, as there is a need to stabilize the domestic currency after the monetary authority had previously devalued it by 40%. Additionally, the overnight lending rate was reduced by the same margin of 100 basis points, bringing it also to 25%.