NBE, Banque Misr new CDs attract EGP 67 bln in 24 hours. Al-Ahram
NBE and Banque Misr issued on Sunday two three-year CDs, one of them with a fixed yield of 19 percent disbursed monthly, while the second is with a decreasing yield of 22 percent. The action followed the two-percent key interest rates hike the Central Bank of Egypt applied on Thursday.
NBE said on Monday that the two CDs have attracted savings worth EGP 48 billion, while head of Banque Misr Mohamed El-Etreby announced last night the CDs it issued attracted EGP 19 billion.
NBE also declared that there is a huge demand for the two CDs.
El-Etreby said that the key reason behind the issuance of the 22 percent decreasing-yield CDs is the outlook for declining inflation rates over the coming few years in response to the CBE’s tightening monetary policy.
Since March 2022, the CBE hiked key interest rates by a record total of 10 percent (100 bps) in a bid to curb soaring inflation caused mainly by the war in Ukraine and the global supply chain disruptions.
El-Etreby also attributed the significant demand for these CDs to the beginning of the disbursement of the 18 percent CDs yield, which the two banks issued in March 2022 over one year, so that savings are being shifted to the newly issued CDs.
According to the two banks, the 18 percent CDs attracted a total of $750 billion.
El-Etreby pointed out that there is an optimistic outlook could be taken from a same experience the country went through in 2016 when the inflation accelerated to 33 percent and interest rates were raised to 22 percent, which managed to reduce the inflation rate to six percent.
Egypt’s headline inflation surpassed 31 percent in February, while the core inflation exceeded 40 percent in the same month, according to the latest official figures.
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