A large portion of the US dollars in banks since Monday have come as a result of customers switching parts of their deposits and saving certificates from dollars to Egyptians pounds, according to a prominent banker.
Governor of the Central Bank of Egypt (CBE) Tarek Amer revealed in statements on Saturday that banks had collected $1.4bn in the first week after the decision to float the national currency.
The source told Daily News Egypt that the first four days of the decision—Thursday, Friday, Saturday, and Sunday—saw customers only selling dollars in cash to buy Egyptian pounds, which explains the low amount of dollars banks collected during those days.
He added that since Monday banks have witnessed a new phenomenon: customers selling parts of their deposits and saving certificates in foreign currencies, switching them to Egyptian pounds, and then buying the pound saving certificates with a 16% or 20% interest rate that the banks offered recently.
Amer also revealed the revenues of the new saving certificates, at EGP 70bn.
The source expects that the size of the foreign currency deposits will significantly decrease in November, while Egyptian pound deposits will significantly increase. He also expects, however, that the value of the foreign currency deposits will significantly increase as a result of the pound’s flotation. The dollar rate in banks has doubled, thus the value of these deposits which had been calculated before the flotation decision has also doubled.
He explained, as an example, that $20bn worth of dollar deposits were equal to EGP 175.6bn before the flotation at the official dollar price of EGP 8.78. The value of these deposits would now be equal to about EGP 320bn, at a dollar price of approximately EGP 16, which is more or less the price of the dollar this week.