ahram-
Egypt has renewed Hassan Abdalla’s mandate as acting governor of the Central Bank of Egypt (CBE) for another year, extending his tenure at the helm of the country’s monetary authority until 18 August 2027, according to a decree published in the Official Gazette.
Abdalla will continue to oversee monetary policy and the banking sector as Egypt seeks to consolidate recent gains in reducing inflation and strengthening foreign-exchange liquidity, while navigating risks from regional geopolitical tensions and global economic conditions.
The renewal extends Abdalla’s tenure after he was first appointed acting governor in August 2022, when Egypt was facing severe foreign-exchange shortages, capital outflows, and rapidly rising inflation following the economic fallout from the war in Ukraine.
Abdalla is also acting as Egypt’s governor at the International Monetary Fund (IMF), which is currently engaging with Egypt on an $8 billion loan deal that concludes by mid-December this year.
From FX crisis to inflation targeting
Under Abdalla, the CBE shifted towards a policy framework focused on bringing down inflation, allowing greater exchange-rate flexibility, and restoring foreign-exchange liquidity.
The central bank has increasingly used inflation as its main monetary-policy anchor, targeting headline inflation at seven percent, plus or minus two percentage points, by the fourth quarter of 2026.
A major turning point came in March 2024, when the CBE raised its key interest rates by six percent (600 bps) at an extraordinary meeting and allowed the pound to weaken sharply against the dollar.
The overnight deposit rate was raised to 27.25 percent, the overnight lending rate to 28.25 percent, and the main operation rate to 27.75 percent.
The measures were aimed at containing inflation, narrowing the gap between the official and parallel foreign-exchange markets, and encouraging foreign-currency flows back into the formal banking system. They also formed part of a broader economic adjustment programme agreed with the International Monetary Fund (IMF), which expanded Egypt’s Extended Fund Facility from $3 billion to $8 billion.
Cautious shift towards monetary easing
As inflation pressures eased, the CBE began cutting interest rates in 2025 while maintaining a relatively restrictive monetary stance.
By the end of 2025, the overnight deposit and lending rates had fallen to 20 percent and 21 percent, respectively, as the central bank responded to improving inflation indicators while remaining cautious about potential price pressures.
The CBE has continued to balance the need for further disinflation against risks from exchange-rate movements, fiscal measures, commodity prices, and regional geopolitical tensions.
Abdalla’s renewed mandate therefore comes as the central bank moves from the acute crisis-management phase of 2022-2024 towards consolidating macroeconomic stability, with inflation, exchange-rate flexibility, and foreign-exchange liquidity remaining key policy priorities.
The CBE is also expected to continue supporting the resilience of Egypt’s banking sector and advancing financial and digital reforms during the new one-year mandate.
