The Central Bank of Egypt withdrew 13.5 billion Egyptian pounds, approximately $270 million, from the banking system through an open market operation on Tuesday, June 9. Carried out at an interest rate of 19.5%, with the participation of two banks, this intervention is part of liquidity management instruments and aims to strengthen the effectiveness of monetary policy in the local market.
An adjustment in monetary management
In this context, the Central Bank revised the terms of its main deposit placement operations through the open market. Until now, these operations were conducted through weekly fixed-rate auctions, with a proportional allocation of bids. Specifically, the amounts were distributed based on each bank’s share of total submissions.
The monetary institution explains that it aims to align its practices with international standards for managing liquidity surpluses, while improving the transmission of its monetary policy decisions.
Focus on more transparency
From now on, all offers submitted by participating banks will be accepted, replacing the proportional allocation system that was previously in place.
The Central Bank also specified that the results of each deposit placement operation will be regularly published on its website, in an effort to increase transparency and better monitor liquidity developments in the banking system.
