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Egypt Central Bank Expected to Leave Interest Rates Unchanged

Egypt’s central bank is likely to leave its overnight interest rates on hold. (AFP)
Egypt’s central bank is likely to leave its overnight interest rates on hold. (AFP)
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Egypt Central Bank Expected to Leave Interest Rates Unchanged

Egypt’s central bank is likely to leave its overnight interest rates on hold. (AFP)
Egypt’s central bank is likely to leave its overnight interest rates on hold. (AFP)

Egypt’s central bank is likely to leave its overnight interest rates on hold on Thursday, a Reuters poll showed, as inflation remained below target and growth appeared to be picking up.

Of 16 analysts polled, 15 believed the Central Bank of Egypt (CBE) would leave rates unchanged at its regular monetary policy committee meeting. One predicted a cut of 50 basis points (bps).

The central bank slashed its benchmark rate by 300 bps last March and another 50 bps each in September and November.

The overnight lending rate is now 9.25 percent and the overnight deposit rate 8.25 percent, their lowest since July 2014.

“February’s low inflation outturn supports a rate cut, but recent global market jitters between rising commodity prices and higher global interest rates are likely to push the CBE to maintain rates on hold,” said Mohamed Abu Basha of EFG Hermes.

Urban consumer price inflation accelerated to 4.5 percent in February from 4.3 percent in January, still below the five percent to nine percent target range set by the central bank in December.

“Despite inflation remaining weak at the start of the year, we expect the headline inflation rate to increase in the coming months,” said James Swanston of Capital Economics.

The economy grew by an annualized 1.35 percent in the last half of 2020 and by two percent in the final quarter, Planning Minister Hala al-Saeed said on Wednesday.

She expected it to grow by 2.8 percent in the first quarter of 2021 and 5.3 percent in the second quarter.

On Monday, the CBE said remittances from Egyptians working abroad rose 10.5 percent year-on-year to $29.6 billion in 2020.

Remittances during the final quarter of the year stood at about $7.5 billion, up from about $7 billion the previous year, it added.

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Presidential Election: A Crucial First Step toward Saving Lebanon from Economic Crisis

The vacant presidential seat at Baabda Palace after President Michel Aoun's term ended (Reuters)
The vacant presidential seat at Baabda Palace after President Michel Aoun's term ended (Reuters)
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Presidential Election: A Crucial First Step toward Saving Lebanon from Economic Crisis

The vacant presidential seat at Baabda Palace after President Michel Aoun's term ended (Reuters)
The vacant presidential seat at Baabda Palace after President Michel Aoun's term ended (Reuters)

Since 2019, Lebanon has faced one of its worst economic crises in modern history, affecting all aspects of life. The local currency has lost over 95% of its value, driving inflation to record levels and making goods and services unaffordable. Poverty and unemployment have surged.
Amid this, political divisions have paralyzed government action, preventing any effective response to the crisis.
The recent war with Israel added to the burden, causing huge human and material losses estimated by the World Bank at $8.5 billion. This has made Lebanon’s economic and social struggles even harder to resolve, with no president in place to lead the country.
The presidential post in Lebanon has been vacant since President Michel Aoun's term ended in October 2022, leaving the country without a leader to address growing economic and financial issues.
This vacancy has stalled government formation, making it difficult for Lebanon to negotiate with international donors like the International Monetary Fund (IMF), which demands major reforms in exchange for aid.
Choosing a new president is now a critical priority, not only to regain local and international confidence but also to begin the long-needed reforms.
One major challenge the new president will face is the reconstruction effort, which is estimated to cost over $6 billion. This is a huge financial burden that will require significant resources and effort to secure funding.
Reconstruction in Lebanon is not just about fixing infrastructure or repairing damage; it is a key test of the country’s ability to restore its role on the regional and international arena.
To achieve this, Lebanon needs a president with a clear vision and strong international connections, able to engage effectively with donor countries and major financial institutions.
Without credible and unified political leadership, Lebanon’s chances of gaining external support will remain limited, especially as international trust has been shaken by years of mismanagement and lack of reforms.
Keeping Lebanon’s deepening crises in mind, the people are hoping that electing a new president will offer a chance for economic and political recovery.
The new president, along with a strong government, is expected to rebuild trust both locally and internationally and restore political stability—key factors for stopping the economic decline and encouraging growth.
For instance, reviving Lebanon’s vital tourism sector will require better security and restoring confidence in the country as a safe place for investment.
This can only happen with political leadership that has a clear plan for reconstruction and necessary reforms.
Given Lebanon’s ongoing financial struggles, the new president’s ability to address these challenges will be critical to rescuing the country and guiding the economy toward recovery and sustainable growth.