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Attractive saving certificates with dollar deposits to remove restrictions on foreign currency: Pharos - Daily News Egypt

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Attractive saving certificates with dollar deposits to remove restrictions on foreign currency: Pharos

These certificates can be bought in dollars and other foreign currencies, with interest being paid in Egyptian pounds, in a move aimed at providing foreign liquidity to the bank.


By Mohamed Ahmed

The banking system is witnessing significant shifts in dealing with depositors, the latest of which was Al Baraka Bank of Egypt issuing savings certificates in Egyptian pounds for three years with an annual return of 13.5%, according to a study by Pharos Financial Investment Co.

These certificates can be bought in dollars and other foreign currencies, with interest being paid in Egyptian pounds, in a move aimed at providing foreign liquidity to the bank.

Pharos explained that the issuance of such certificates indicates that the Central Bank of Egypt (CBE) has been taking its first steps towards the abolition of restrictions on dollar deposits that put a cap on deposits at $10,000 a day, or $50,000 a month.

“In our vision, these steps are in line with the government’s direction, which includes the re-activation of the export support programme within the framework of efforts to strengthen the competitiveness of Egyptian exports, and strengthen the foreign exchange channels and attract them to the banking system, in light of the shortage in foreign resources and the activity of the black market of foreign currency,” the study said.

Al Baraka Bank certificates were issued after the National Bank of Egypt (NBE) and Banque Misr, the two largest Egyptian banks in terms of asset size, issued investment certificates in Egyptian pounds this month, with an annual yield of 12.5%, as well as the certificates issued by the Industrial Development & Workers Bank Of Egypt (IDBE)with a 13.75% yield.

Brokerage firms and asset management divisions noticed a direction among individual investors towards retrieving the value of bills and bonds and reducing investment portfolios in order to buy the newly issued savings certificates. Pharos emphasised that this trend will result in a low liquidity levels.

Topics: dollar

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https://dailyfeed.dailynewsegypt.com/2015/11/23/attractive-saving-certificates-with-dollar-deposits-to-remove-restrictions-on-foreign-currency-pharos/
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