Monday 07/Apr/2025 – 08:13 PM
The Central Bank of Egypt is preparing to hold the second meetings of the Monetary Policy Committee for the year 2025, to determine the fate of interest rates, which is scheduled to be held on Thursday, April 17th, in accordance with the schedule announced through the official website of the bank.
That meeting comes in light of positive economic indicators, most notably the noticeable decline in basic inflation rates, which opens the door to strong possibilities to start a gradual reduction in interest rates on deposit and lending operations.
Annual inflation in Egypt
The annual inflation in Egypt had witnessed a significant decrease during the recent period, as it fell from 24% in January 2025 to 12.8% in February of the same year, while the central bank announced that the basic annual inflation decreased to 10% in February, compared to 22.6% in January.
The central bank data showed that the monthly change rate in the basic record for consumer prices amounted to 1.6% in February 2025, compared to 13.2% in the same month of 2024, and 1.7% in January 2025, indicating a concrete calm in inflationary pressures.
For his part, Rami Abu Al -Naja, Deputy Governor of the Central Bank, explained that monetary policy depends on a pre -emptive approach aimed at ensuring the continuity of decline in inflation rates, and not only to respond to immediate data. He added that the bank will not hesitate to make the decision to reduce interest rates when sufficient indicators are available on the sustainability of this trend, stressing that the bank is keen to make deliberate decisions to ensure financial and critical stability.
Expectations to reduce interest rates
In a related context, Dr. Ezz Hassanein, the economist, expected that the next April meeting will witness the beginning of the adoption of a critical facilitation policy, likely to reduce the price of the Coridor (the benefit of deposit and lending for one night) by between 2% and 3%, stressing that this step will be taken into consideration, taking into account the preservation of the Egyptian market’s attractiveness to foreign investors, and ensuring the continued flow of investments in dollars in government debt tools.
The economist of Cairo 24 indicated that the impact of the interest reduction policy will be direct on savings certificates and the rest of the savings vessels, as interest rates will decrease on them, including savings with changing return, while certificates with fixed return will remain unchanged.
This meeting is one of the most expected meetings, in light of the continued global and regional economic challenges, and investors and observers await the decisions that will be issued by it because of its direct impact on the money market, exchange rates and investment movement.
Cash reserves in Egypt
The Central Bank revealed that net international reserves increased to 47.757.1 million dollars at the end of March 2025, an increase of $ 363 million.
The Egyptian foreign exchange reserves increased by $ 129 million during the month of February; To record 47.394 billion dollars, compared to 47.265 billion in January, according to data issued by the Central Bank of Egypt.
The monetary reserve in Egypt consists of the state reserves of gold, the returns of the Suez Canal, the Egyptian Export Tourist, and the transfers of Egyptians working abroad.
It is noteworthy that Egypt’s foreign exchange reserves increased by $ 156 million during the month of January; To record 47.265 billion dollars, compared to 47.109 billion in December 2024, according to the data of the Central Bank of Egypt.
