Banque Misr and the National Bank of Egypt (NBE) on Tuesday announced a reduction in the interest rate for the three-year dollar-denominated certificates of deposits (CDs) with a quarterly return to five percent – down from six percent annually.
The interest rate on the three-year CDs with a prepaid return, equivalent to the Egyptian pound, fell to 7.5 percent – down from eight percent annually – with cumulative rate of 22.5 percent.
The emergence of these high-yield certificates was linked to the worsening foreign exchange crisis that Egypt suffered two years prior to the recent economic reforms in March.
The NBE reduced the interest rate on the three-year “Al Ahly Fawran” and “Al Ahly Plus” dollar-denominated savings certificates by 0.5 percent.
The annual return on “Al Ahly Fawran” certificate fell to 7.5 percent from eight percent, while the return on the “Al Ahly Plus” certificate decreased to 5.5 percent annually from six percent.
The reduced return rate applies only to new certificate issues, not existing ones.
The bank had reduced the return on these certificates in October from nine percent to 8.5 percent.
The Banque Misr also reduced the return rate on the three-year “Al-Qimma” and “Elite” dollar-denominated CDs by 0.5 percent, for new certificates only.
Accordingly, the annual return on the “Al-Qimma” certificate decreased to 7.5 percent from eight percent, while the return on the “Elite” certificate decreased to 5.5 percent annually from six percent.
Banking expert Mohamed Abdel-Aal said, “The purpose of its establishment (this CDs) was to attract dollar deposits from expatriate workers into the Egyptian banking system to help bridge the cash gap that existed prior to the reform measures announced by the Central Bank in March 2024.”
Abdel-Aal added that the prices of these products have become very expensive compared to the interest rates of similar products worldwide.
Edited translation from Al-Masry Al-Youm
