The foreign deposits growth rate in banks in the Egyptian market jumped to 13.9 percent in March 2015, compared with 8.1 percent the preceding February, an increase of 5.8 percent, according to the Central Bank of Egypt (CBE).
According to the CBE, deposits in foreign currencies in the Egyptian banking sector increased from the equivalent of EGP 247.97 billion ($32.49 billion) in February to the equivalent of EGP 262.47 billion ($34.40 billion) in March.
In a CBE statement on Monday, foreign currency deposits accounted for 18.3 percent of total bank deposits during March, compared with 17.9 percent the preceding February.
“This great increase in foreign currency deposits in the Egyptian banking sector goes back to a number of banks raising interest rates on foreign currency savings as they seek to attract savings in those currencies,” said Tamer Youssef, Head of Treasury & Capital Markets at a foreign bank operating in Egypt.
“In March, the family sector raised its foreign currency savings by the equivalent of EGP 10.58 billion ($1.39 billion), as it reached the equivalent of EGP 163.06 billion ($21.37 billion) against EGP 152.47 billion ($19.98) in February. This indicates the banks’ success in attracting this sector’s savings through raising interest rate on them,” said Youssef. “There is another explanation to the increase of foreign currency savings in banks operating in the Egyptian market.”
He added: “It may be the result of liquidation of Dollar stocks in the Egyptian Stock Exchange during March, in light of the declines witnessed by the stock market and the deposit of the value of those shares in the form of bank deposits.”
The CBE’s numbers also revealed an increase in total deposits in banks during March valued at EGP 48.10 billion ($6.30 billion). The deposits reached EGP 1.663 trillion ($218.03 billion), against EGP 1.616 trillion ($211.73 billion) the preceding February.
“The great increase in the total deposits in the Egyptian banking sectors goes back mainly to the increase in family sector savings which accounts for 75.7 percent of total bank savings” said Ahmed el-Khouly, head of Treasury at the Housing & Development Bank (HDB).
The family sector’s savings jumped during March to EGP 1.063 trillion ($139.25 billion) against EGP 1.038 trillion ($136.01 billion) in February, with an increase of EGP 24.71 billion ($3.24 billion), according to the CBE.
This sector, according to El-Khouly, is still worried about investing their money outside banks, as they lack alternative opportunities for employing their savings.
By Hossam Mounir
This story has been edited from the source material.
© 2022 Daily News Egypt.