Following a bold monetary policy move by the Central Bank of Egypt (CBE), Egypt’s financial landscape is rapidly adjusting. On April 17, the CBE cut its benchmark interest rates by 2.25%, bringing the deposit rate to 25% and the lending rate to 26%, as the country navigates inflationary pressures and strives to stimulate economic growth.
The immediate ripple effect was felt across Egypt’s banking sector, especially among major players like the National Bank of Egypt (NBE) and Banque Misr, prompting swift revisions to some of the market’s most sought-after Certificates of Deposit (CDs).
“The CBE’s decision signals a shift toward an expansionary monetary stance after an aggressive tightening cycle over the past two years,” explained Nader El-Fekky, Chief Market Strategist at Misr Invest.
“This will inevitably recalibrate savings behavior, investment appetite, and credit growth in the coming quarters,” he added.
The NBE adjusted the Triple Platinum Certificate, reducing its return from 27% to 25.25%, with returns still paid quarterly. Investors can continue to purchase certificates starting from EGP 1,000, and the instruments retain perks such as borrowing against the certificate and credit card issuance.
Simultaneously, the NBE announced the suspension of its Annual Platinum Certificate offering a fixed 27% return, effective Sunday, April 27, marking the end of one of the highest-yielding fixed savings options in the market.
Meanwhile, Banque Misr cut rates on its popular three-year variable-return certificate, lowering returns from 27% to 24.75%. This product had recently gained strong traction among retail clients seeking inflation-hedged returns.
“The adjustments were inevitable,” said Amal Rashad, Head of Retail Banking at Banque Misr.
“With the monetary easing now underway, maintaining ultra-high fixed yields would have distorted the deposit structure and liquidity targets for banks.”
Despite the yield adjustments, Egypt’s banks continue to experience robust deposit inflows.
According to CBE data, customer deposits surged to EGP 13.599 trillion in December 2024, up from EGP 13.217 trillion in November, a monthly increase of EGP 382 billion.
A deeper dive shows:
- Government deposits reached EGP 2.938 trillion (mostly in local currency).
- Non-government deposits hit EGP 10.661 trillion, with households accounting for EGP 6.076 trillion — reinforcing the critical role of Egyptian savers in financial system stability.
Foreign currency deposits also remain resilient, reflecting continued remittance inflows and a cautious hedging strategy among corporates and wealthy individuals.
On the lending side, the CBE reported that total credit facilities extended by banks climbed to EGP 8.375 trillion by December 2024, up from EGP 7.209 trillion in June — a notable six-month rise of EGP 1.166 trillion.
“The surge in credit growth is a healthy sign,” noted Karim Soliman, economist at Arab Capital Markets.
“It suggests businesses are gearing up for expansion, particularly in manufacturing, logistics, and real estate sectors, which bodes well for GDP growth over the next 12-18 months.”
Banking insiders hint that new hybrid savings products — combining fixed and variable returns — could soon hit the market as banks seek to attract longer-term deposits without being locked into high fixed rates amid falling interest rates.
In addition, financial technology (fintech) platforms are expected to roll out digital certificates and savings bonds with customizable maturity periods — a move designed to appeal to younger, tech-savvy customers.
Analysts forecast that if inflation continues to moderate and currency stability holds, the EGP could see strengthening pressures, encouraging banks to lower deposit rates further in the second half of 2025
As Egypt transitions into a new monetary phase, investors and savers alike must adapt strategies. While high-yield savings options are diminishing, opportunities are growing in equity markets, real estate funds, and corporate bonds.
