By Patrick Werr / Reuters
CAIRO: Egypt’s government will begin selling three-year certificates of deposit (CDs) to Egyptians living abroad on Tuesday in a bid to reduce the country’s balance of payments shortfall and help fund its budget deficit.
A year of political turmoil has eaten into key sources of foreign exchange for Egypt by weakening tourism and inflows of investment, generating a balance of payments deficit for the fourth quarter of 2011 of $5.65 billion versus a surplus a year earlier.
The CDs will carry an interest rate of 4 percent paid semi-annually and will be denominated in multiples of $1,000. They will be issued by the National Bank of Egypt and secured by the Egyptian government, the central bank said.
“The National Bank of Egypt has concluded its preparations to launch the diaspora CDs on behalf of the Egyptian government,” the central bank said in an emailed statement.
“The marketing campaign will kick off today and all the participating banks will be ready to issue the CD for subscribers.”
The CDs will be renewed automatically unless the holder notifies the National Bank of Egypt at least one month before they mature.