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Standard Chartered analyst Bader Al Sarraf has revised his outlook, predicting the Central Bank of Egypt will maintain its benchmark interest rate at 19% through fiscal year 2026 due to a resurgence in inflation. This delays earlier expectations of rate cuts and contrasts with the bank’s previous forecast of a 13% rate by year-end 2026. The decision reflects ongoing economic pressures, including rising consumer prices and potential currency volatility, which may require prolonged tight monetary policy. For forex markets, Egypt’s delayed easing could weigh on the Egyptian pound (EGP) as higher rates may attract foreign capital seeking yield. Traders should monitor inflation data and central bank statements for clues on future policy shifts. The prolonged high-rate environment may also impact regional capital flows, particularly in the Gulf, where Egypt’s economic stability is a key factor for cross-border investments. The implications for MENA investors are significant. A delayed rate cut could slow Egypt’s economic recovery, affecting trade and investment in the region. Key risks include persistent inflation and potential currency depreciation. Investors should watch for updates on Egypt’s fiscal reforms and external debt management, which will shape the central bank’s policy trajectory in the coming months.
