Goldman Sachs Breaks Consensus With Egypt Rate Hike Call

Goldman Sachs is standing outside market consensus by expecting the Central Bank of Egypt to raise interest rates, while most forecasts still point to no change.

Key insights:

• Goldman Sachs expects the overnight deposit rate to rise by 100 basis points from 19% to 20%.
• Market reports also indicate Goldman is pricing cumulative tightening of around 200 basis points across Q2 and Q3 2026 if inflation risks persist.
• The call contrasts with seven other forecasts that expect rates to remain unchanged, including views from Bank of America and Morgan Stanley.
• Egypt entered 2026 after a major easing cycle. The CBE cut rates by 725 basis points during 2025, followed by another 100 basis point cut in February 2026.
• The central bank then paused in April, keeping the overnight deposit rate at 19%, the lending rate at 20%, and the main operation rate at 19.5%.
• Inflation remains the key risk. Urban inflation slowed only slightly to 14.9% in April from 15.2% in March, after pressure from energy costs and regional tensions.
• The CBE raised its 2026 baseline inflation forecast to 16% from 11%, while an alternative energy shock scenario points to 17% inflation if regional conflict persists.
• Growth assumptions were also revised lower. The CBE now expects real GDP growth of 4.9% in FY 2025 to 2026 and 4.8% in FY 2026 to 2027, down from 5.1% and 5.5%.
• The IMF has warned that Egypt should monitor the impact of higher energy prices closely and use monetary policy tools if price pressures persist.

The main takeaway is that Egypt’s monetary policy has shifted from easing momentum to inflation defence. Goldman Sachs appears to be pricing a scenario in which energy costs, currency pressure and inflation expectations force the CBE to act earlier than consensus expects.

For investors, the decision will signal whether the central bank prioritizes growth support or price stability as geopolitical and energy risks continue to shape Egypt’s macro outlook.