Upcoming ALCO Meeting to Review Certificate Rates
Mohamed El-Etreby, CEO of the National Bank of Egypt (NBE), announced that the bank's Assets and Liabilities Committee (ALCO) is scheduled to convene next week to review the interest rates on savings certificates. This follows the recent decision by the Central Bank of Egypt (CBE) to cut its benchmark interest rates by 225 basis points.
Central Bank Implements First Rate Cut in Over Four Years
In its second Monetary Policy Committee meeting of 2025, the Central Bank surprised markets by implementing its first interest rate reduction in more than four years. The move is aimed at reinforcing economic stability and curbing inflationary pressures.
Details of the Interest Rate Reduction
As per the CBE’s decision, the overnight deposit rate was reduced to 25%, the lending rate to 26%, and the main operation rate to 25.5%. The credit and discount rate was also lowered to 25.5%.
Monetary Policy Aimed at Controlling Inflation
In an official statement, the Central Bank explained that the rate cut aligns with its strategy to maintain an accommodative monetary policy stance. The goal is to reinforce the downward trajectory of inflation and stabilize inflation expectations over the medium term.
Improving Inflation Outlook
The CBE further noted that monthly inflation performance since the beginning of the year has begun to return to its historical norms. This signals an improved inflation outlook, although the pace of decline is expected to be slower throughout 2025 and 2026.
Long-Term Inflation Targets Extended
In its final meeting of 2024, the Central Bank extended its time horizon for achieving inflation targets. It now aims to reach an inflation rate of 7% (±2%) by the fourth quarter of 2026, and 5% (±2%) by the end of 2028. These targets are part of the CBE’s gradual shift towards a fully-fledged inflation-targeting framework.
Market Awaits NBE's Decision on Savings Certificates
The local market is closely watching the upcoming ALCO meeting at the National Bank of Egypt, as its outcomes will directly impact the yields on savings certificates—one of the most popular saving tools among Egyptians, particularly in times of economic uncertainty.
