RFA Breakfast Paper - August 20, 2026

Egypt Holds Rates at 19% as Inflationary Pressures Persist

The Central Bank of Egypt kept its key interest rate unchanged at 19% at its August

2026 meeting, in line with market expectations, marking the fifth consecutive meeting

on hold and extending the pause in its nearly year-long monetary easing cycle. The

decision reflects renewed inflationary risks from the Middle East conflict, particularly

through pressure on the Egyptian pound and higher fuel import costs, while headline

inflation accelerated to 14.9% in July after moderating through June. Economic activity

is estimated to have softened in Q2 2026, with output remaining below potential

despite expectations for growth to average 5% in FY2025/26. Policymakers are

expected to maintain the current policy stance through the end of 2026 before

potentially resuming rate cuts in Q1 2027, as inflation is projected to return to the 7%

±2% target range in H2 2027.

Markets close lower as bond yields rebound

U.S. equity markets ended lower on Thursday as Treasury yields reversed part of the

previous session's decline, with the 10-year Treasury yield rising to 4.70%. The increase

in yields weighed on broader market sentiment, particularly within consumer-facing

sectors, as investors continued to assess the implications of higher borrowing costs and

the outlook for economic growth. In commodity markets, WTI crude oil climbed to

approximately $87 per barrel, extending its recent gains amid ongoing disruptions to

shipping and energy flows through the Strait of Hormuz. Higher energy prices continue

to represent an upside risk to inflation expectations and could complicate the path

toward future monetary easing.

NGX extends losing streak to eight sessions as Oil & Gas selloff weighs on sentiment

The Nigerian equity market closed lower for the eighth consecutive trading session,

with the NGX All-Share Index (ASI) declining 0.30% to 240,037.80, while market

capitalization fell 0.28% to ₦154.98 trillion. The slight divergence between the ASI and

market capitalization was driven by the additional listing of 15 billion ordinary shares

by Veritas Kapital Assurance Plc following its private placement. Market breadth

remained weak, with 14 gainers against 28 losers, reflecting continued risk aversion.

HMCALL (+9.38%), TRANSEXPR (+8.90%), and MCNICHOLS (+8.33%) led the gainers, while

INTENEGINS (-9.85%), WAPIC (-9.84%), and FTGINSURE (-9.76%) topped the losers' list.