Using monthly data of Egypt over the period from 2008:M6 to 2013:M1, we extend the linear Taylor rule to a regime-switching framework, where the transition from one regime to another occurs in a smooth way, using a logistic smooth transition regression (LSTR) approach. We find that the nonlinear Taylor rule improves its performance with the advent of special events, such as the global financial crisis in 2008 and the general political instability defined by outbreaks of revolution. In particular, our results show that the adoption of a nonlinear speci?cation instead of a linear one leads to a reduction in errors of 90 basis points in 2008 and 20 basis points in 2012.