El-Halfawy noted that this anticipated step aligns with the wave of rate cuts initiated by the central bank last year, during which the CBE reduced interest rates five times by a total of 725 basis points, the most recent of which took place in December 2025. Current interest rates stand at 21% for lending and 20% for deposits.
He added that the reason behind the expected rate cut is the
CBE’s objective to reduce inflation to 7% by the end of 2026. Current annual
inflation recorded 12.3% in December 2025, supported by relative stability in
the prices of food and beverages.
El-Halfawy explained that lowering interest rates will offer
an opportunity to reduce borrowing costs for investors without threatening
price stability.
At the end of last year, the CBE’s Monetary Policy Committee
decided to cut the overnight deposit and lending rates, as well as the main
operation rate, by 100 basis points to 20%, 21%, and 20.5%, respectively.
It also reduced the credit and discount rate by 100
basis points to 20.5%.The CBE stated that the decision reflects the MPC’s
assessment of recent inflation developments and its outlook since the previous
meeting. It added that global economic growth continues to recover moderately,
although the outlook remains clouded by uncertainty over trade policies,
ongoing geopolitical tensions, and a slowdown in global demand growth.