Egypt raises interest rates for first time since 2024

Egypt's central bank raised interest rates by 100 basis points on Thursday, its first increase since 2024, as the country faces economic pressure and inflation linked to the Middle East war.

The Central Bank of Egypt said the overnight deposit rate was raised to 20.0 percent, the overnight lending rate to 21.0 percent and the main operation rate to 20.5 percent.

The bank said the decision came amid “challenging external conditions and elevated uncertainty”.

Official data showed inflation at about 14 percent year-on-year in October, up from about 13 percent in September. The Egyptian pound also hit a record low this week, trading at 56 to the US dollar.

Egypt has largely avoided direct involvement in the Middle East war, but the fighting has pushed some shipping companies away from the Suez Canal, a key source of foreign currency. Foreign Minister Badr Abdelatty said last month that Egypt had lost nearly $11 billion since 2023 because of lower Suez Canal revenues.

Egypt is also dealing with an economic crisis driven by external debt and high global energy prices. The country imports most of its energy needs.