The Central Bank of Egypt kept its key interest rate at 19% at its August 2026 meeting, matching market expectations and marking the fifth consecutive meeting without a change. The decision extends a pause in an almost year-long monetary easing cycle as the Middle East conflict increases pressure on the Egyptian pound and fuel import costs. The central bank’s overnight lending rate remains 20% and its main operation rate 19.25%. Headline inflation accelerated to 14.9% in July after easing through June, although it remains below the 38% peak recorded in 2024. Inflation is still above the central bank’s 7% ±2 percentage-point target range. Policymakers are expected to keep rates unchanged through the end of 2026 before resuming easing in the first quarter of 2027, with inflation projected to return to the target range in the second half of 2027. The prolonged hold is intended to contain inflation and support pound stability, while maintaining the yield differential that can attract foreign portfolio investment into Egyptian assets. It also leaves borrowing costs high for households and businesses, making future rate cuts dependent on clearer and sustained disinflation.