A number of private banks hastened to protect their local currency deposits, and urged their owners to not withdraw and deposit these at the governmental banks—which offered savings vessels in local currency with an interest rate of 20%.
According to an official at these banks, the decision to move the domestic interest rates comes as a response to the Central Bank of Egypt’s (CBE) decision on Thursday to increase the basic interest rate by 3%, in order to protect citizens’ savings, after the decision to float the Egyptian pound and the prices hikes in fuel. This is expected to lead to a severe wave of inflation in the coming period.
The National Bank of Egypt (NBE), Banque Misr, and Banque du Caire increased their one-and-a-half-year saving certificates at a 20% yield/return, and increased their three-year certificates’ yield to 16%.
The Commercial International Bank (CIB) increased interest on one of its saving certificates to 19% for the quarterly yield and 18.5% for the monthly yield.
SAIB increased its saving certificates’ yield from 12.5% to 16%, and offered an 18-month savings certificate at a yield of 20%.
The National Bank of Abu Dhabi (NBAD) decided to increase the interest rate on its deposit and savings accounts by 3%. The bank is also considering increasing the interest rates on its saving certificates.
Misr Iran Development Bank (MIDB) is studying increasing interest rates on its saving vessels in local currency on Tuesday, while the Egyptian Arab Land Bank (EALB) decided to offer 18-month savings certificates at a yield of 20%, and a three-year certificate at a yield of 16%, similar to the step taken by governmental banks.
The Arab Investment Bank (AIB) and other banks have followed in the footsteps of governmental banks, after studying the market and its liquidity requirements from the local currency.
The Industrial Development & Workers Bank of Egypt decided to increase its three-year savings certificates’ yield by 3% to reach 16.25%, and decided to increase the interest rate on its deposits in pounds by 2% to 3%.
A large a number of savings certificates in local currency automatically increased according to the basic interest increase issued by the CBE, because they are linked to certificate pricing at the CBE. These certificates are issued by roughly 12 banks.