Central Bank Holds Rates at 19%/20%; Raises 2026 Inflation Forecast to 16–17%

The Central Bank of Egypt's Monetary Policy Committee held the overnight deposit rate at 19% and the overnight lending rate at 20% at its May 21 meeting — the second consecutive hold. More significantly, the CBE raised its 2026 inflation forecast to 16–17%, up sharply from a prior estimate of approximately 11%, citing regional uncertainty stemming from the Gaza conflict, energy price pressures, and currency volatility. The CBE expects inflation to accelerate through Q3 2026 before gradually declining toward its medium-term target range. Egypt had achieved a multi-year low of 11.9% inflation in January 2026, down from a 40% peak in 2023, but the revised forecast signals that disinflation has stalled. The hold decision aligns with IMF EFF program benchmarks and comes as the 7th review mission is active in Cairo.