Egypt Daily News – The Central Bank of Egypt (CBE) has taken significant action in the open market by withdrawing a substantial amount of liquidity, totaling 1.210 trillion Egyptian pounds from 28 banks, following a recent policy adjustment related to interest rates.
This move comes after the CBE withdrew 933.550 billion pounds during an auction the previous week.
The CBE’s Monetary Policy Committee is set to convene next Thursday to deliberate on interest rates. In their last meeting, they decided to keep the overnight deposit rate at 27.25%, the lending rate at 28.25%, and the main operation rate at 27.75%. Additionally, the credit and discount rate has been maintained at 27.75%.
To enhance the management of excess liquidity and improve the effectiveness of its monetary policies, the CBE has issued new guidelines regarding its main deposit operations.
This includes a shift from an allocation method to a full allotment method for accepting bids, set to take effect on April 23, 2024. Under the full allotment method, all bids from banks will be accepted at the set interest rate, rather than being distributed based on the proportion of bids submitted.
The CBE has emphasized its commitment to international best practices and aims to manage liquidity in a manner that maintains balance and stability, ensuring that the average overnight weighted interest rate in the interbank market aligns closely with the established policy rate.
The results of these deposit operations will be publicly accessible via the Central Bank’s official website.
