Sources expected Egyptian dollar certificates of deposit to be affected after Saudi Arabia shut its embassy in Egypt. The crisis between Saudi Arabia and Egypt was fuelled by the detention of Ahmed al- Gizawi in the kingdom after officials there said he tried to smuggle in anti-anxiety tablets.
The Egyptian dollar certificates of deposit was launched this month by seven banks; most prominently National Bank of Egypt, for Egyptians living in Arab countries.
Sources said Egyptians living there are wary that this crisis may make Saudi Arabia sacking them if the government or the ruling military council did not intervene to solve this crisis. Accordingly, Egyptian workers in Saudi Arabia did not highly demand these certificates launched to back Egypt’s economy that could borrow to finance the budget’s deficit that reached EGP 144 billion. In addition, the certificates targets supporting Egypt’s dollar resources that decreased the country’s foreign reserves by US$ 22 billion since 25th of January revolution.
Egyptian dollar certificates registered US$ 2.5 million, while Egypt was considering US$ 2.5 billion. 90% of these certificates were demanded by Egyptians in United Arab Emirates from National Bank of Egypt, Banque Misr and National Bank of Abu Dhabi. 10% were demanded from Arab National Bank, National Bank of Kuwait and Ahli United Bank and Arab Banking Corporation by Egyptians living in Saudi Arabia, Kuwait, Qatar, Bahrain and Tunisia.
Despite having a high return of 4%, Egyptian certificates of deposit witnessed a low demand, reflecting a clear rejection by Egyptians to back their country’s economy.
The marketing campaign of these certificates is assigned to Tarek Nour Agency which shot a number of TV advertisements stressing on Egyptians’ national duty to support the country’s economy.
Sources added that this move has been faced with a wave of rejections by some Islamic political parties who demanded to issue Islamic Sharia-compliant sukuk instead. However, government neglected their demands as there is no law in Egypt regulating this type of instruments. These advertisements are being broadcasted on channels in Arab countries where Egyptians are living.