Egypt Post considers interest rates response

CAIRO – 5 June 2017: The Egypt Post is considering raising interest rates on its saving accounts and the potential effect on its volume of savings, a source in Egypt Post said on Sunday.

Speaking to Egypt Today the source who requested to remain anonymous, said that the postal institute, which also offers a range of financial services, is opting to wait for the effect of the 2 percent interest rate hike of the Central Bank of Egypt (CBE) on the market before deciding their course of action.

The deposit volume at Egypt Post has reached LE 188 billion; LE 115 billion of this is deposited at the state-owned National Investment Bank (NIB.)
Egypt Post does not fall under the jurisdiction of the CBE; however, a CBE representative is a member of its board of directors.

In a surprise move on May 21, the CBE increased its key interest rates by 200 basis points, pushing the overnight deposit rate up to 16.75 percent, the overnight lending rate to 17.75 percent, and the CBE’s main operation to 17.25 percent.

This was the first action since the CBE raised the rates by 300 basis points the same day it free-floated the pound on November 3, 2016.

Several banks responded to that action by lifting their interest rates last week. The highest percentage came at Misr Iran Development Bank, which increased rates on saving accounts by 300 points to reach 15 percent, and 200 points on deposits ranging between 8 and 12.5 percent.

Other financial institutions such as the National Bank of Egypt (NBE), Banque Misr, Commercial International Bank, Qatar National Bank (QNB) and Al-Ahli Bank, have also followed the same approach and raised their interest rates on deposits and saving accounts.