Egypt: CBE Preview: Holding the Line

研报英文原文证据摘录

Egypt: CBE Preview: Holding the Line

Idea

May 14, 2026 03:51 PM GMT

Morgan Stanley & Co. International plcMEgypt | EEMEA Yomna Moheieldin

Economist

CBE Preview: Holding the Line Yomna.Moheieldin@morganstanley.comGeorgi Deyanov +44 20 7677-0771

Georgi.Deyanov@morganstanley.com +44 20 7425-7006

We expect the CBE to keep rates on hold at 19%, despite the

downside surprise inflation in April, as geopolitical uncertainties Exhibit 1 : We expect CBE to remain on hold

remain elevated. until year-end

40 MS Forecast

Economics | We expect the CBE to remain on hold despite lower than expected Policy rate, %

30 Headline CPI, %Y

April inflation: We expect the continued uncertainties regarding the status of the Target band

strait of Hormuz to keep the CBE on its path of caution with a hold in its May 21st 20

meeting. In our Mid-Year outlook published this week, we expect inflation in Egypt 10

to re-accelerate to 15-17% and to peak in 3Q26, due to second round effects from 0

March energy hikes and FX pass-through in addition to unfavorable base effect from 2020 2021 2022 2023 2024 2025 2026 2027

Source: Central Bank of Egypt, Haver Analytics, Morgan Stanley Research

the low inflation in 3Q25. Egypt still maintains positive real rates to anchor forecasts

expectations, but ex-post real rates have decreased from 7.1% in January to 4.1%

after the April inflation print.

April headline inflation surprised to the downside: April inflation print came out

at 14.9%, well below both our forecast and market consensus of 15.9%. This lower-

than-expected print challenges our view on the strength of second-round effects

from the March energy price hikes, since these effects appeared muted in April.

Monthly inflation slowed sharply to 1.1% from 3.2% in March. Food and beverage