Banking expert Shaimaa Wagih expects the Central Bank of Egypt (CBE) to keep interest rates unchanged at the next Monetary Policy Committee (MPC) meeting, describing a hold as the most balanced option given the need to maintain price and foreign-exchange market stability while avoiding a heavier financing burden on companies and productive activities.

Wagih explained that the rate decision will not hinge on the inflation rate alone. It will also depend on how sustainable the decline in inflation is, the direction of the exchange rate, and the likelihood that any external pressure feeds through to import costs and domestic prices, all of which calls for a comprehensive assessment of economic indicators before a decision is made.

She added that a limited rate hike remains a possibility if new pressure emerges on the pound or if inflation rises in a way that threatens the targeted path of monetary policy, noting that this option would need to be weighed against its economic cost and its impact on various sectors.

She pointed out that although raising interest rates helps curb inflationary pressure and makes saving in pounds more attractive, it also raises borrowing costs and weighs on investment, expansion and production decisions. That could affect growth and employment prospects and add to the financing burden on companies and productive activities.

On the other hand, Wagih stressed that cutting interest rates before inflation and the foreign-exchange market have clearly stabilized could pose risks to price expectations and to the appeal of savings products. The timing of any possible cut is therefore tied to how clear and sustained the signs of stability are.

She noted that the trade-off facing the MPC rests on striking a delicate balance between containing inflation and preserving monetary stability on one hand, and not burdening economic activity with unnecessary additional financing costs on the other, while taking investment and production needs into account.

Wagih said that, on this basis, holding interest rates remains the most likely scenario, with continued caution toward any inflationary developments or exchange-rate pressure that might call for a reassessment of the monetary policy stance.

She stressed that achieving sustainable monetary stability over the medium term cannot rely on interest rates alone. It requires strengthening domestic production, making exports more competitive, raising productivity and expanding foreign-currency resources, which would support the pound's stability and give monetary policy more room to support economic growth.

The CBE's MPC will hold its seventh meeting of 2026 on Thursday, 29 October 2026, to decide on deposit and lending interest rates, after keeping them unchanged at its last meeting in September.