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Tuesday, 31 May 2022

Bye-bye, 18% certificates of deposit…

NBE, Banque Misr suspend sales of 18% CDs: State-owned National Bank of Egypt (NBE) and Banque Misr will no longer be selling one-year, 18% certificates of deposit (CDs) introduced after the Central Bank of Egypt’s devalued the EGP on 22 March, according to a statement (pdf) from Banque Misr and remarks by NBE to the local press.

Savers have poured c. EGP 750 bn into the CDs since their launch 10 weeks ago in a bid to pull EGP liquidity into the banking system.

It was only a matter of time: Both banks are paying an “extremely high cost” for the CDs, Banque Misr Chairman Mohamed El Etreby told Sky News Arabia earlier this month.

Looking for an instrument into which to park some liquidity? Both banks have now increased the rate on three-year certificates to 14% from 11%. CIB is offering a three-year CD at 13.5%.

MEANWHILE- Prime Minister Moustafa Madbouly held talks with CBE head Tarek Amer about the central bank’s new import rules and funding purchases of strategic goods, cabinet said in a statement. In March, the central bank began requiring businesses to use letters of credit (L/Cs) to import goods rather than documentary collection, a move that attracted criticism from trade and industry associations.

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