Total foreign-currency deposits at Egyptian banks have hit its lowest level in July since April 2018, backed by the strong performance of the Egyptian pound.
Deposits in foreign currencies declined to EGP 708.63 billion ($42.9 billion) at the end of July from EGP 714.6 billion ($43.3 billion) in June, according to official data.
The decrease in foreign-currency deposits at the Egyptian banks by the end of July came as a result of the healthy performance of the Egyptian pound and the expectations of cutting interest rates, a source at one of the banks told Mubasher.
The dollarisation processes have slashed recently on the back of the Egyptian pound’s solid performance as several clients have transferred their deposits to the EGP after it rose against the US dollar, the source who asked not to be named highlighted.
The source added that clients have also turned to the high-yield certificates of deposits amid expectations of further interest-rate cuts over the coming period.
Year-on-year, foreign-currency deposits fell by 2.2% in July, versus EGP 724.9 billion ($43.9 billion) in the same month of 2018.
The Central Bank of Egypt (CBE) previously announced that the North African nation’s foreign reserves rose by $565 million on a monthly basis, reaching to $44.916 billion at the end of July, versus $44.351 billion in June.
It is worth noting that the CBE’s Monetary Policy Committee (MPC) had reduced overnight deposit rate, overnight lending rate, and the rate of the main operation by 150 basis points to 14.25%, 15.25%, and 14.75%, respectively.