Egyptian Banks Dismiss 30% Deposit Certificate Rumors Ahead of Key CBE Rate Decision
Expert casts doubt on high-yield offerings as central bank eyes further easing.
Rumors have circulated regarding the potential launch of new savings certificates by Egyptian banks, offering yields as high as 30%, ahead of the Central Bank of Egypt’s (CBE) upcoming Monetary Policy Committee (MPC) meeting.
The MPC is scheduled to hold its final meeting of the year this Thursday to determine interest rates. Speculation is rife that the committee may implement its fifth rate cut since April.
The CBE has already reduced interest rates four times since April, totaling a 6.25% decrease. These cuts included 2.25% in April, 1% in May, 2% in August, and another 1% in October.
The emergence of these rumors coincides with the maturity of one-year certificates from Bank Misr and the National Bank of Egypt (NBE), which previously offered a 27% yield.
However, banking expert Sahar Al-Damati dismissed the likelihood of Egyptian banks offering savings certificates with yields comparable to the discontinued 27% certificates. Speaking exclusively to Al-Osboa, Al-Damati stated, “Banks incurred significant burdens from issuing 27% savings certificates during periods when credit rates contracted due to high repayment costs.”
Al-Damati further noted that the Central Bank of Egypt has initiated a monetary easing cycle, which is likely to continue into the next year. This suggests that the era of offering savings certificates with yields exceeding current rates has diminished, particularly with slowing inflation. For more on the CBE’s monetary policy, visit the Central Bank of Egypt’s official website.
Currently, Bank Misr and the National Bank of Egypt offer fixed-rate savings certificates with a monthly yield of up to 17% over a three-year term, with a minimum purchase threshold of EGP 1,000.
Both banks also provide declining-rate savings certificates. Bank Misr’s declining certificates offer 20.50% in the first year, 17% in the second, and 13.5% in the third. The National Bank of Egypt’s declining certificates feature rates of 23% in the first year, 18.50% in the second, and 14% in the third.
