Egypt signed an agreement under Phase II of a World Bank financing package as its central bank raised rates and warned that regional conflict could fuel imported inflation.
Egyptian Foreign Minister Badr Abdelatty and World Bank regional director Alwaleed Alatabani signed the agreement on Nov. 1, the State Information Service reported. The World Bank Group approved the broader $1 billion package in May. A United Kingdom guarantee accounts for $200 million. The agreement advances the second operation in a three-part concessional series; the bank says its financing terms are more favorable than ordinary market borrowing.
The program is meant to give private firms more room to compete and improve oversight of state-owned companies. It also seeks to strengthen tax collection and domestic debt markets, with a lower financing expense for the government as a stated aim. Another component would automatically enroll Takaful and Karama social assistance recipients in the Universal Health Insurance System. The World Bank has identified private-sector job creation and support for vulnerable households as goals.
The Central Bank of Egypt (CBE) raised rates by 100 basis points on Oct. 29. Its overnight lending rate is now 21%, compared with 20% for overnight deposits; the main-operation rate stands at 20.5%. Annual headline inflation reached 13.9% in September, while the annual core measure was 14.1%, the CBE said.
The bank warned that prolonged regional conflict and supply interruptions had added pressure to energy and other commodity prices, increasing the risk of higher prices reaching Egypt from abroad. CBE data show the average market selling rate for the U.S. dollar rose from EGP52.3658 on Oct. 6 to EGP56.1733 on Oct. 28, a gain of about 7.3%. Remittances from Egyptians abroad totaled $33.9 billion in January-August, up 27.2% from the same period in 2025, the CBE reported.
The next financing marker is a pair of reviews at the International Monetary Fund (IMF). In October, the IMF said it expected Egypt’s final review under its Extended Fund Facility and third review under its Resilience and Sustainability Facility in the fourth quarter. Completing both could make about $2.3 billion available, the Fund said. The Extended Fund Facility is due to expire Dec. 15.
