Central Bank of Egypt withdraws $3.24bln in open market operations

PHOTO

The Central Bank of Egypt (CBE) withdrew EGP 1.249trn in open market operations from 30 banks on Tuesday. This follows last week’s withdrawal of EGP 1.082trn from 31 banks. The CBE recently adjusted the interest rate offered during its weekly fixed-rate auction to 27.75%.

The CBE has introduced new guidelines for deposit tying in open market operations. These operations occur weekly through a fixed-rate tender, where the CBE announces the operation size and accepts bids based on each bank’s proportion relative to the total bids, applying the main operation rate.

In an effort to adhere to international best practices for liquidity management and enhance the impact of monetary policy decisions, the CBE has transitioned from the allocation method to accepting all bids (Full Allotment) for the main operation of deposit tying. This change took effect on Tuesday, April 23, 2024, with operation results published on the CBE’s website.

The CBE remains committed to maintaining balance and consistency by managing liquidity, ensuring that the weighted average overnight interest rate in the interbank market aligns with the main operation rate (corridor rate).