Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Foreign Deposits Fall to Lowest Level Amid Stronger EGP


Sun 01 Sep 2019 | 08:35 PM
Taarek Refaat

The recent strength of the Egyptian pound contributed to the decline of foreign deposits in the banking sector to its lowest level in July, since April 2018.

Official data showed that foreign deposits fell in July 2019 to $ 42.9 billion compared with $ 43.3 billion in June.

An official source said that the decline in foreign deposits in July was due to a stronger pound and expectations of a rate cut.

The source pointed out that the dollarization process observed a decline supported by the strength of the pound. "Customers transferred their deposits to the Egyptian currency after the appreciation of the pound against the US dollar," he said, adding that high-yield certificates along with expectations of further interest cuts, in the coming period, led to this decline.

Moreover, foreign deposits fell 2.2% year-on-year in July from $ 43.9 billion in the corresponding month last year.

The central bank of Egypt (CBE) announced that Egypt's foreign exchange reserves rose by $ 565 million at the end of July, on a monthly basis, to reach $ 44.916 billion, compared with $ 44.351 billion a month earlier.

Two weeks ago, the Monetary Policy Committee (MPC) decided to cut the deposit and lending rates and the price of the main operation by 150 basis points to 14.25 percent, 15.25 percent, and 14.75 percent, respectively.