Banks operating in the Egyptian market largely ignored the decision of the Central Bank of Egypt (CBE) to raise its key interest rates by 2% on Sunday. The banks kept their interest rate in Egyptian pounds unchanged throughout last week.
Bankers told Daily News Egypt that if banks do change the interest rate, it will only include short-term savings, such as deposits and savings accounts, as the saving certificates have already reached the maximum interest rate they can offer and will not be increased again.
The deputy chairperson of the National Bank of Egypt (NBE), Yehia Aboul Fotouh, said that the Asset-Liability Committee (ALCO), which is responsible for determining the bank’s interest rates, will meet within days to discuss the fate of interest on the bank’s savings coffers.
He ruled out the potential of increasing the interest on saving certificates. “They have already reached the maximum and cannot be increased,” he stressed.
He added that if the bank approves any new interest rate increases, the decision will be limited to short-term saving instruments only.
Mohamed Mashhour, the vice chairperson of Banque du Caire, said that the bank is set to meet to discuss the fate of the interest rate this week, noting that there will not be an interest rate increase on certificates, nor new certificates, for now.
A new increase in interest rates will be limited to short-term deposits and savings accounts only, he added.
Managing director and CEO of BLOM bank Mohamed Ozalp said that the bank is currently surveying the market and studying the banking sector before it takes a decision to raise the interest rate on its saving instruments.
He noted that the current rates are already high, so there will be no need to rush a new increase before studying the market.
Last week has seen only very limited moves by very few banks to increase their interest rates.
The move was limited to raising the interest of some savings instruments linked to the deposit rate at the CBE, along with a very limited number of short-term saving instruments. Banque Misr raised the interest rate by 2% on variable yield savings vessels linked to the CBE’s deposit rate. It also raised interest rates of other deposits schemes and saving accounts, but kept the yield on savings certificates unchanged.
Misr Iran Development Bank also raised the annual interest rate on saving accounts by 3% to reach 15% up from 12%.
The National Bank of Kuwait also raised the interest rate on deposits, savings accounts, and current accounts with 1%.
Meanwhile, the average yield on 5-year treasury bonds jumped by 1.4% to reach 18.76%.