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State-owned banks secured EGP460B through 25-22.5% CDs, to be pulled off market later today

The two state banks announced that they would stop issuing the high-yield CDs later today

By: Business Today Egypt

Tue, Jan. 31, 2023

Egypt’s largest state-owned banks, Banque Misr and the National Bank of Egypt (NBE), have secured EGP 460 billion through their new one-year certificates of deposit (CDs) offer since their launch, according to Chairman of the Federation of Egyptian Banks and Banque Misr, Mohamed El-Etreby.

The CDs, with annual and monthly yields of 25% and 22.5% respectively, were issued within the state’s efforts to tackle inflation and attract foreign currency. Private banks followed suit soon after with similar offerings.

The NBE and Banque Misr began issuing the CDs a few days prior to the Central Bank of Egypt’s devaluation of the EGP on January 11th, sending the EGP to its lowest rate on record against the USD.

The two state banks announced that they would stop issuing the high-yield CDs later today.

Al Masr Al Youm reported that Banque du Caire will be taking its one-year 25% CDs off the market in tandem with NBE and Banque Misr. Private banks CIB and QNB AlAhly have not revealed if they are following suit.

Earlier this week, El-Etreby explained in a TV interview that USD-denominated resources have improved due to heightened confidence by international institutions and individuals that have exchanged their US Dollars for EGP or into the CDs.

The CBE is set to hold the first monetary policy meeting this year on Thursday with expectations that it will raise its overnight interest rates in the face of inflation.