The market is awaiting the return of banks to work tomorrow, Sunday, after their weekend holiday, to find out the fate of interest rates on their savings accounts and loan products after the Central Bank of Egypt’s decision to cut interest rates last Thursday by 1%.
The Monetary Policy Committee of the Central Bank had decided to reduce the Central Bank’s key interest rates, which are the main indicator of the direction of the pound’s interest rate in the short term, to 20% for deposits, 21% for lending, and 20.5% for the credit and discount rate and the main operation rate.
In the first reaction to the Central Bank’s decision, interest rates on variable-rate certificates and some loan products linked to the basic interest rates (“corridor”) were reduced by the same percentage as the reduction approved by the Central Bank.
The Egyptian market offers many variable-rate savings certificates, the most famous of which are the National Bank of Egypt’s “Platinum” certificate and the “Summit” certificate issued by Banque Misr, in addition to a large number of variable-rate loan products.
In the same context, the market is awaiting the repercussions of the interest rate cut by the central bank on the yield of local debt instruments offered by the government this week, and the extent to which this cut will affect foreign demand for those instruments.
The Ministry of Finance will offer two treasury bill tenders worth EGP 60 billion tomorrow, Sunday: one for EGP 20 billion with a 91-day maturity, and the other for EGP 40 billion with a 273-day maturity. On Monday, it will offer two treasury bond tenders worth EGP 37 billion: one for EGP 14 billion with a two-year maturity, and another for EGP 23 billion with a three-year maturity. Additionally, it will offer EGP 5 billion in sovereign fixed-rate sukuk with a three-year maturity.
