Egypt central bank hikes rates to 20% in a surprise, first hike since 2024

What happened. On 29 October 2026 the Monetary Policy Committee of the Central Bank of Egypt raised its key rates by 100 basis points. The overnight deposit rate went from 19% to 20% and the overnight lending rate from 20% to 21%. The main operation rate and the discount rate are now 20.5%. It is the first hike since March 2024. The central bank's website lists the new rates as effective from 1 November 2026.

Why it is a surprise. Before the meeting, all analysts in a Reuters poll taken 22 to 27 October expected rates to stay unchanged for a sixth meeting in a row. The bank cut by 1 point in February and then held five times.

The background. Core inflation in Egypt eased to 14.1% a year in September and urban inflation to 13.9%. But according to an analyst at HC Securities, the pound has lost about 14% against the dollar since the start of the year and fell past its previous low of 54.73 per dollar. Analysts named the risks: expensive oil and commodities, a weak pound and regional tension. The bank's inflation target is 7% plus or minus 2 points in the second half of 2027.

What it can mean for you. A higher rate usually makes pound deposits and government bonds pay more and loans cost more. For foreign investors it signals that the bank is ready to defend the pound. How much banks pass on to deposit and loan rates is not known yet.

Our take. The hike shows the bank is now more worried about a weak pound and imported inflation than about slower growth. This is not advice to buy or sell the pound or anything else.

Hechos confirmados

• On 29 October 2026 the Central Bank of Egypt raised its key rates by 100 basis points: the overnight deposit rate to 20% from 19% and the overnight lending rate to 21% from 20%.^[1][2]
• The main operation rate and the discount rate are now 20.5%. Before the decision they were 19.5%.^[1][3]
• The central bank's website lists the new rates as effective from 1 November 2026.^[1]
• It is the first rate hike since March 2024.^[2]
• All analysts in a Reuters poll taken 22 to 27 October expected no change. The bank had held rates at five meetings in a row after a 1-point cut in February.^[3]
• Core inflation eased to 14.1% a year in September and urban inflation to 13.9%.^[3]
• According to an HC Securities analyst, the pound has lost about 14% against the dollar since the start of the year and fell past its previous low of 54.73 per dollar.^[3]
• The central bank's inflation target is 7% plus or minus 2 points in the second half of 2027.^[3]

Implicaciones

• Nuestra lecturaLoans in pounds will likely get costlier, and deposit rates may rise.
• Nuestra lecturaThe hike may support the pound and foreign demand for Egyptian government debt.
• ConfirmadoOvernight deposit and lending rates are up by 1 point.

Todavía no se sabe

• How the bank itself explained the decision: we have not yet read its statement.
• Whether this is a one-off hike or the start of a series.
• How fast banks raise deposit and loan rates.
• How the pound reacts in the coming days.

A quién afecta

Egypt, Middle East. People in Egypt with pound savings or loans, investors in Egyptian government debt, anyone who follows emerging market currencies

Fuentes

1. Central Bank of Egypt: Monetary Policy Committee Decisions (current key rates) 29 de octubre de 2026 · oficial
2. Investing.com: ЦБ Египта повысил ключевую ставку на 100 базисных пунктов 29 de octubre de 2026 · medios
3. Daily News Egypt: CBE expected to hold interest rates for sixth consecutive meeting 28 de octubre de 2026 · medios