Cairo, Egypt – Egypt’s central bank on Thursday announced that it was lowering interest rates for the first time since 2020, days after the government announced a reduction in fuel subsidies.
Its overnight deposit rate, overnight lending rate, and the rate of the main operation now stood at 25 percent, 26 percent and 25.5 percent, respectively.
The bank cited “recovery in economic activity for the fourth consecutive quarter” and a decline in inflation to its lowest rate in three years.
The central bank has raised or held interest rates since 2020, during an economic crisis that saw the local currency devalued several times against the dollar.
The Egyptian authorities last week raised fuel prices for the fourth time in a year.
The latest move comes weeks after the International Monetary Fund approved a $1.2 billion payout to Cairo following its fourth review of the country’s economic reform programme.
Authorities have issued a number of tough reforms to comply with an IMF deal that was expanded from $3 billion to $8 billion last year.
Egypt remains burdened by soaring foreign debt, which has quadrupled since 2015, reaching $155.2 billion by September 2024. Much of the debt is tied to large-scale infrastructure projects, including a new capital east of Cairo.
