EG Interest Rate Decision November 2025: Stability Amid Evolving Macroeconomic Challenges
The Central Bank of EG held its benchmark interest rate steady at 21.00% on November 20, 2025, matching the previous reading and slightly exceeding market expectations of 20.50%. This decision marks a continuation of the tightening cycle that began earlier this year, as the bank balances inflation control with growth concerns. Drawing on data from the Sigmanomics database, this report analyzes the latest rate decision in the context of recent macroeconomic trends, monetary policy, fiscal dynamics, and external risks, while offering a forward-looking assessment of EG’s economic trajectory.
Table of Contents
The November 2025 interest rate decision for EG reflects a cautious stance amid persistent inflationary pressures and moderate economic growth. The Central Bank’s choice to maintain the rate at 21.00% follows a series of cuts from the peak of 27.25% in February 2025, signaling a gradual easing from aggressive tightening earlier in the year. This stability aims to anchor inflation expectations while supporting financial market confidence.
Drivers this month
- Inflation remains elevated at 14.30% YoY, down from 16.10% six months ago but above the 8% target.
- GDP growth slowed to 2.10% YoY in Q3 2025, reflecting external demand softness.
- Currency volatility has moderated, with the EGP stabilizing against the USD after recent depreciation.
Policy pulse
The current 21.00% rate sits well above the neutral real rate estimated at 8-10%, indicating a still restrictive monetary stance. The Central Bank signals readiness to adjust if inflation deviates significantly from the target range.
Market lens
Immediate reaction: The EGP/USD pair appreciated 0.30% within the first hour post-announcement, while 2-year government bond yields declined 12 basis points, reflecting relief at policy continuity.
Core macroeconomic indicators underpin the Central Bank’s decision, highlighting a mixed but cautiously improving economic environment. Inflation, employment, and external balances remain key focus areas.
Inflation trends
Consumer Price Index (CPI) inflation eased to 14.30% YoY in October 2025, down from 16.10% in April but still more than 6 percentage points above the Central Bank’s 8% target. Food and energy prices contributed 5.20 and 3.10 percentage points respectively to the headline inflation, reflecting ongoing supply chain disruptions and geopolitical tensions in the region.
Growth and employment
Real GDP growth slowed to 2.10% YoY in Q3 2025, compared to 3.40% in Q1 2025. The slowdown is attributed to weaker export demand and subdued private investment. Unemployment remains elevated at 11.50%, with youth unemployment particularly high at 22%.
External balances
The current account deficit narrowed to 3.80% of GDP in Q3 2025, aided by higher remittance inflows and a modest rebound in tourism receipts. However, foreign direct investment (FDI) inflows remain subdued, limiting capital account support.
Drivers this month
- Inflation deceleration but still above target.
- Moderate GDP growth with downside risks from external shocks.
- Stable currency and improved market sentiment.
This chart highlights the Central Bank’s transition from peak restrictive policy to a steady stance, signaling confidence in inflation moderation but caution amid external uncertainties. The rate plateau suggests a wait-and-see approach before further easing.
Market lens
Immediate reaction: The EG sovereign bond curve flattened slightly, with 2-year yields dropping 12 basis points, indicating improved investor confidence. The EGP strengthened modestly, reflecting positive sentiment on policy stability.
Looking ahead, the Central Bank faces a complex environment balancing inflation control, growth support, and external vulnerabilities. Scenarios range from bullish to bearish depending on global and domestic developments.
Bullish scenario (30% probability)
- Inflation falls below 10% by mid-2026 due to improved supply chains and subdued demand.
- GDP growth rebounds to 4% YoY supported by stronger exports and investment.
- Central Bank begins gradual rate cuts in Q2 2026 to stimulate growth.
Base scenario (50% probability)
- Inflation remains sticky around 12-14% through 2026.
- Growth remains moderate at 2-3% YoY.
- Monetary policy stays on hold until clearer inflation trends emerge.
Bearish scenario (20% probability)
- Inflation spikes above 16% due to renewed geopolitical shocks or currency depreciation.
- GDP growth stalls or contracts amid external demand shocks.
- Central Bank forced to hike rates again, risking financial market stress.
EG’s interest rate decision in November 2025 underscores a cautious but steady monetary policy amid persistent inflation and moderate growth. The Central Bank’s commitment to maintaining the 21.00% rate reflects confidence in recent disinflation trends while preparing for potential external shocks. Fiscal discipline and structural reforms will be critical to complement monetary efforts and support long-run stability. Market participants should monitor inflation data, currency movements, and geopolitical developments closely as key drivers of future policy shifts.
Key Markets Likely to React to Interest Rate Decision
The interest rate decision influences several tradable assets closely tied to EG’s macroeconomic outlook. The following symbols historically track monetary policy shifts and market sentiment:
- EGSTK – EG’s benchmark stock index, sensitive to interest rate changes impacting corporate borrowing costs.
- EGPUSD – The local currency pair, directly affected by monetary policy and capital flows.
- EGCBTC – Emerging crypto pair reflecting risk appetite and capital movement in EG.
- EGFIN – Financial sector equities, highly sensitive to interest rate changes.
- USDEGP – The inverse currency pair, useful for hedging and speculative flows.
FAQ
- What is the significance of EG’s current interest rate?
- The 21.00% rate reflects a restrictive stance aimed at controlling inflation while supporting economic stability amid external risks.
- How does the interest rate impact EG’s currency?
- Higher interest rates tend to strengthen the EGP by attracting capital inflows, while cuts may weaken it due to outflows.
- What are the risks to the Central Bank’s policy outlook?
- Risks include geopolitical shocks, commodity price volatility, and slower global growth, which could force policy tightening or easing.
Key takeaway: EG’s steady interest rate signals cautious optimism but requires vigilant monitoring of inflation and external risks to navigate 2026 successfully.
EGSTK – EG benchmark stock index, sensitive to interest rate changes.
EGPUSD – Local currency pair, directly impacted by monetary policy.
EGCBTC – Crypto pair reflecting risk appetite in EG.
EGFIN – Financial sector equities, sensitive to interest rate shifts.
USDEGP – Inverse currency pair, used for hedging and speculation.
The interest rate has remained steady at 21.00% in November 2025, unchanged from October and significantly lower than the 27.25% peak in February 2025. This marks a 6.25 percentage point reduction over nine months, reflecting a gradual easing cycle.
Comparing the current rate to the 12-month average of 23.50%, the Central Bank’s policy is clearly shifting from aggressive tightening to a more balanced approach, aiming to sustain growth without reigniting inflation.