Egyptian banks to repay over EGP 500 bln CDs in January: Where will they go?

These large amounts are expected to channel into several springs in the market, as it seems hard for banks to retain them by issuing other CDs.

“CDs have lost their allure, as inflation rates leaped above their highest rate of 25 percent, while their cost became higher with interest rates maintained at around 20 percent,” banking expert Hany Aboul-Fotouh told Ahram Online.

Egypt’s average inflation reached 34.1 percent in 2023 and is expected to reach 27.4 percent in 2024.

The expected improvement in inflation in 2024 could take a hit by the disbursement of the due CDs, as a portion of people could prefer to use their savings to buy durable goods likes cars, in a desperate attempt to deal with volatility in the economic situation, Aboul-Fotouh suggested.

“However, most of the half-trillion pounds due CDs will stay in banks, as they are savings of Egyptian families that prefer the safety and availability of bank deposits to different investment vehicles,” the expert stated.

Some of this money could be invested into gold and real estate despite the latest surges in gold prices, he added.

Gold prices in Egypt surged by around 17 percent month-on-month in December, and the gold pound coin reached an unprecedented level at more than EGP 26,000.