After the Central Bank’s decision to “cut interest” … banks meet to discuss the interest rate


10:31 AM

Friday 25 September 2020

I wrote – Manal Al-Masry:

Bank officials said that the Assets and Liabilities Committees responsible for setting the interest rate will hold a meeting next Sunday to discuss reducing interest rates on lending and deposits, after the Central Bank’s decision to cut interest on Thursday, as well as stopping 15% certification in Al-Ahly Bank and Egypt.

Yesterday, Thursday, the Central Bank of Egypt decided to cut interest rates by half a percent to 8.75% on deposit and 9.75% on lending, at a meeting of the Monetary Policy Committee, for the first time in 6 months, after 4 successive times of fixing interest.

In their meeting to discuss the interest rate cut, the banks took the decision of the National Bank of Egypt to suspend the high-yield 15% certificate last Monday.

All banks are affected by the decisions of the National Bank of Egypt and the interest rates on certificates and all savings coffers due to their acquisition of the largest percentage of the banking market.

The National Bank and Egypt decided to stop issuing the annual savings certificate with a return of 15% as of last Monday after it collected the proceeds of sales of 383 billion pounds, which began on March 22, and this certificate was the highest in Egypt, with a one-year deadline.

The central bank proved the interest in the last 4 consecutive meetings, after its decision to cut interest by 3% at the extraordinary monetary policy meeting last March, amid packages of measures to confront the repercussions of the emerging Corona virus.

Medhat Qamar, Chairman of the Board of Directors of the Egyptian Land Bank, said that a meeting of the ALCO Committee will be held next Sunday to discuss pricing scenarios for all products in accordance with the decision of the Monetary Policy Committee at its meeting on Thursday.

He pointed out that the meeting takes into account the changes in the banking market and not the decision to stop 15% certification only, but for various reasons related to the level of liquidity and interest rates in other banks.

Abdul-Rafi Al-Hashemi, head of the retail banking sector at Attijariwafa Bank Egypt, said that the bank is meeting to decide the fate of interest, in light of the results of the central bank meeting, yesterday, Thursday, by cutting interest by half a percent.

He pointed out that his bank’s move to reduce or stabilize interest is linked to the Central Bank’s decision, as well as the reactions of competing banks and their interest rates.

An official source at Banque Misr Iran said that the bank decided to settle the fate of interest on deposits and lending next week, after the central bank’s monetary policy committee decided to cut interest.

He indicated that the bank did not move to reduce the interest on deposits after the decision of the National Bank of Egypt and Egypt to stop the high-yield certificate, and any decision was postponed after reviewing the decision of the Monetary Policy Committee.

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