Egyptian Banks to Reset Interest Rates Following Central Bank Hike

Banks operating in Egypt will begin adjusting interest rates on savings products and loan offerings on Sunday. The move follows a decision by the Central Bank of Egypt (CBE) last Thursday to increase key interest rates by one percentage point.

The CBE’s Monetary Policy Committee raised the overnight deposit rate to 20% and the overnight lending rate to 21%. The main operation rate and the discount rate were also increased to 20.5%. These adjustments mark a shift following five consecutive meetings where the committee chose to hold rates steady.

Immediate Market Adjustments

Variable-rate certificates of deposit and loan products linked directly to CBE benchmarks began reflecting the increase immediately. Popular investment vehicles, including the National Bank of Egypt’s Platinum Certificate and Banque Misr’s Al Qimma Certificate, are among the products subject to these adjustments.

Government Debt and Upcoming Auctions

The market is now monitoring how the rate increase will influence the yields on domestic debt instruments. The CBE, acting on behalf of the Ministry of Finance, has scheduled significant Treasury bill and bond auctions for the coming week.

On Sunday, the central bank will offer two Treasury bill auctions totaling EGP 110 billion. This includes an EGP 30 billion offering with a 91-day maturity and an EGP 80 billion offering with a 273-day maturity. On Monday, the bank will offer four Treasury bond auctions valued at EGP 27 billion, featuring a mix of variable and fixed-yield instruments with maturities ranging from one-and-a-half to five years.

Why it matters: The CBE’s decision serves as a primary indicator for the direction of Egyptian pound interest rates. The upcoming Treasury auctions will test foreign investor appetite for domestic debt and provide clarity on how the broader financial sector will absorb the cost of borrowing following the hike.