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Bankers expect interest rates on savings instruments in pounds to rise - Daily News Egypt

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Bankers expect interest rates on savings instruments in pounds to rise

The Monetary Policy Committee of the CBE decided to raise deposit and lending rates at the Egyptian central bank by 1.5%, brining the rate to 10.75% for deposits and 11.75% for lending


Bankers expect interest rates on savings instruments and loan products issued in Egyptian pounds to increase, following the Central Bank of Egypt’s (CBE) decision to raise its interest rate by 1.5% on Thursday.

The Monetary Policy Committee of the CBE decided to raise deposit and lending rates at the Egyptian central bank by 1.5%, brining the rate to 10.75% for deposits and 11.75% for lending.

Assets and liabilities committees at commercial banks, which are responsible for setting interest rates, will begin researching anticipated effects of the CBE’s decision on their deposit and loan rate, as well as the competing rates on the market, on Sunday morning, according to Director General of Treasury at the Industrial Development and Workers Bank of Egypt (IDBE) Haitham Abdel-Fattah. Abdel-Fattah added that interest rates will be lifted on all saving instruments in pounds.

He noted that the CBE’s decision to raise the interest on the pound was taken to protect the pound after a previous decision to devalue it last week.

“Return on deposits may rise during the next two weeks by at least 1% after the CBE raised interest rates,” said head of the treasury at a foreign bank operating in Egypt, Tamer Youssef. He noted that private banks may decide to wait until public banks take related decisions before raising the returns on savings certificates

He added that the return on treasury bills and bonds may see an increase by 0.75%, as soon as this week, where the return on debt instruments usually rise by half the value of the increase approved by the CBE on its basic interest rates.

According to assistant general manager of the treasury at a private bank operating in the local market, Osama El-Manialawy, the return on the saving certificates issued in Egyptian pounds is not likely to exceed the 12.5% interest rate offered by the platinum saving certificates recently put forward by Banque Misr and the National Bank of Egypt. The 12.5% soft cap is thought to avoid impacting the new savings certificates issued in US dollars, which offer a 15% interest rate.

https://www.dailynewsegypt.com/2016/03/19/410562/
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