The Central Bank of Egypt (CBE) raised its basic interest rates by 6% in an emergency meeting of the Monetary Policy Committee (MPC) last Wednesday, affecting the returns on savings and loan products in banks.
Some banks reacted quickly to CBE’s decision by increasing the interest rates on variable-return certificates and some loan products linked to CBE’s basic interest rates, which automatically adjust after any CBE decision. The National Bank of Egypt (NBE) and Banque Misr also issued new savings certificates for three years with a decreasing interest rate of 30% for the first year, 25% for the second year, and 20% for the third year, with annual payouts. The banks also revised the interest rates on some of their existing certificates with fixed or variable returns.
More banks are expected to follow suit this week and raise their interest rates on both savings and loans, to retain their depositors and manage their funding costs.
The new savings certificates issued by NBE and Banque Misr have a minimum value of EGP 1000 and can be purchased by natural persons or minors, Egyptians, or foreigners. The term starts from the next business day after the purchase.
NBE also increased the interest rate on the “Ahli Daily” current account to 20% as the maximum return. The interest is calculated and added daily, and the minimum balance for opening the account and earning interest is EGP 500,000.
Banque Misr also increased the interest rate on the current account for pensioners with a monthly return of 6% to reach 22%. The minimum balance for opening this account is EGP 1,000 and the interest is paid monthly. The bank also increased the interest rate on the current account with a daily return, “Super Cash,” to 23% as the maximum return.
CIB also increased the interest rate on the triple variable-return certificate by about 6%. The minimum amount to buy this certificate is EGP 3,000 and the interest rate is 24.25%.
The Suez Canal Bank also increased the interest rate on the “Al-Hassad” certificate with a monthly return to 26%, based on the deposit rate announced by CBE minus 1.25%, and on the certificate with a quarterly return to 26.25%, based on the deposit rate announced by CBE minus 1%, and on the certificate with a semi-annual return of 26.5%, based on the deposit rate announced by CBE minus 0.75%.
