State-owned major banks, the National Bank of Egypt (NBE) and Banque Misr have introduced new high-yield certificates of deposit (CDs) with a three-year tenor and a decreasing yield structure.
These new CDs offer an initial annual yield of 30% for the first year, which decreases to 25% in the second year and further drops to 20% in the third year.
Additionally, the NBE has adjusted the annual yield on its three-year Platinum CD to 26% for the first year, 22% for the second year, and 18% for the third year. It has also modified the yield on the three-year Platinum CD with a fixed annual rate to be 21.5%.
On the other hand, Banque Misr now offers CDs with various maturity options: annually, quarterly, and monthly. The annual yield starts at 30% for the first year, then declines to 25% for the second year and to 20% for the third year. Similarly, the quarterly and monthly yields follow a similar pattern of decreasing rates over the three-year term.
Meanwhile, Banque Misr has adjusted the yield on its three-year fixed-yield “Summit” CDs to be 21.5% annually for new issuances starting from March 6, 2024.
Egypt’s inflation
It is worth noting that CDs are considered a haven for clients to hedge against high inflation rates.
Egypt’s annual headline inflation accelerated in February to 36%, up from 31.2% in January, according to the latest data from the Central Agency for Public Mobilization and Statistics (CAPMAS). Similarly, the annual core inflation rate calculated by the CBE rose to 35.1% in February, from 29% in January.
CBE Governor Hassan Abdallah stated that the bank’s recent actions aim to bring down inflation rates to the target set by the CBE at 7% (±2%) in the fourth quarter of 2024, as well as to maintain price stability in the local market and combat the currency parallel market.
