Goldman Sachs expects the Central Bank of Egypt (CBE) to maintain its current interest rates through October 2025, despite a projected easing in inflation, according to a new report by the U.S. investment bank.
At its latest policy meeting, the Monetary Policy Committee of the CBE opted to keep key interest rates unchanged, a move widely anticipated by market analysts and financial experts across the country.
This decision continues a pattern seen earlier this year when the central bank shifted from aggressive rate cuts to a more cautious approach.
In its second and third meetings of the year, the CBE had cut interest rates by a cumulative 325 basis points. Rates were adjusted to 25.00%, 26.00%, and 25.50% in the second meeting, followed by reductions to 24.00%, 25.00%, and 24.50% during the third. However, the first meeting of 2025 saw no change, and the trend of holding rates appears set to continue at least until the next scheduled session on August 28.
Goldman Sachs analysts, referencing the June 2025 figures from Egypt’s Central Agency for Public Mobilization and Statistics, believe that while inflation is showing signs of decline, the CBE will likely wait until the final quarter of the year before implementing further cuts.
“The Central Bank will be cautious in the coming period regarding a new interest rate cut, until it is certain of its impact on the economic situation in Egypt,” the report noted.
The investment bank forecasts inflation to fall by 13% year-on-year by the end of 2025. However, it also anticipates a temporary rise in the consumer price index over the next two months, reaching nearly 16% year-on-year. This is attributed to recent increases in cigarette prices and expected hikes in energy costs—factors likely to deter the CBE from lowering rates in the short term.
Goldman Sachs now projects a potential 400 basis point interest rate cut in the fourth quarter, revised up from an earlier estimate of 300 points. If realized, this would lower interest rates to 20% by year’s end, rather than the previously anticipated 18%.
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