Posted on 21 Apr 2025
The Monetary Policy Committee (MPC) of the Central Bank of Egypt has lowered overnight interest rates by 225 basis points (2.25%), marking the first rate cut in nearly five years. This should help revive construction activity in the country and boost rebar demand, sources note.
The move brings the lending rate to 26% and the deposit rate to 25%, and is the result of lower inflation. It signals the possibility of further rate cuts in the future, Kallanish notes.
The first quarter saw Egypt’s economy grow for the fourth consecutive quarter, with growth at over 4.3% from Q4 2024, states the MPC.
Annual inflation significantly declined due to a strong base effect, cumulative monetary tightening, and reduced past shocks. Headline and core inflation dropped to 13.6% and 9.4% in March, respectively, marking the lowest core rate in three years.
Cutting policy rates by 225 basis points maintains the right monetary stance to anchor inflation expectations and support disinflation, MPC adds.
“An interest rate cut will revive construction activity in the country, which would support domestic rebar consumption if the policy continues," comments a senior local mill official.
Egyptian rebar consumption in February increased to 554,000 tonnes, up by 22.1% on-month from 453,700t and 13.6% on-year from 487,600t (see Kallanish passim).
Source:Kallanish
