Egypt hikes interest rates for first time since 2024

Egypt’s central bank said on Thursday it was hiking interest rates for the first time since 2024, as the country faces mounting economic pressure and inflation driven by the Middle East war.

“The Central Bank of Egypt (CBE) decided to raise the key policy rates by 100” basis points, it said in a statement.

“The overnight deposit rate, overnight lending rate and the rate of the main operation were raised to 20.0%, 21.0% and 20.5%, respectively.”

Egypt has largely been spared direct involvement in the Middle East war. The fighting, however, has pushed some shipping companies away from its Suez Canal, a key source of foreign currency.

The CBE said its decision “comes amid challenging external conditions and elevated uncertainty”.

According to official data, inflation reached around 14% year-on-year in October, up from about 13% in September.

This week, the Egyptian pound hit a record low, trading at 56 to the US dollar.

Egypt is grappling with a severe economic crisis, driven by an accumulation of external debt and soaring global energy prices.

The country imports the bulk of its energy needs.

Last month, foreign minister Badr Abdelatty said Egypt had lost nearly US$11 billion since 2023 due to a decline in Suez Canal revenues.