Egypt: Softer CPI, same stance: CBE on hold as expected

Research evidence excerpt

Egypt: Softer CPI, same stance: CBE on hold as expected

J P M O R G A N MENA Economic Research

09 July 2026

Egypt: Softer CPI, same stance

CBE on hold as expected

EM, Economic and Policy Research

Francesco Arcangeli

(44-20) 3493-0971

francesco.arcangeli@jpmorgan.com

Gbolahan S Taiwo

• CBE kept policy rates unchanged as expected as the cautious stance (44-20)gbolahan.taiwo@jpmorgan.com3493-3412

remains intact J.P. Morgan Securities plc

• June inflation surprised on the downside at 14.3% versus JPM

expectations of 14.9%.

• Our CPI profile is lower as we now see headline at 15.3%oya in December

from 15.8% previously.

• Still, the room to resume rate cuts this year is limited and we continue to

expect easing to only resume in 2Q27

CBE on hold as expected. The Central Bank of Egypt (CBE) kept policy rates

unchanged at its July MPC meeting - maintaining its 'wait and see’ approach. While

the disinflation trend has continued and underlying price pressures appear more

contained, the CBE remained cautious. In our view, geopolitical uncertainty

remains a key consideration behind the MPC's approach. Egypt's macro outlook,

and in particular the EGP, remains sensitive to developments in the region, with

episodes of heightened geopolitical tension often translating into pressure on

capital flows, risk sentiment, and the exchange rate. We believe the CBE is likely

to remain data dependent, balancing the benefits of lower inflation against the risk

that renewed regional tensions could quickly reverse recent gains and reignite

inflationary pressures through the FX channel.

Figure 1: Egypt CPI headline and CBE O/N deposit rate

% Headline CPI CBE deposit rate

Inflation target band 0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Source: CBE, J.P.