Egypt’s central bank withdraws EGP 1.135t in open market operation auction

The Central Bank of Egypt (CBE) withdrew 1.135 trillion Egyptian pounds from the banking sector on Tuesday through an open market operation auction. This is part of CBE’s strategy to manage surplus liquidity and regulate interest rates within the financial system.

This week’s auction saw 26 banks submitting successful bids at an interest rate of 27.75 per cent, reflecting recent adjustments in the CBE’s bid acceptance policies. The withdrawal follows last week’s operation, where the central bank pulled 792.05 billion pounds from the banking sector through a similar mechanism.

To enhance its monetary policy framework, the CBE has implemented a full allotment system for open market operations since April 23. This approach allows all eligible banks to fully participate in weekly auctions, replacing the previous allocation-based system.

These measures emphasise the CBE’s commitment to ensuring effective liquidity management while maintaining stability in interbank interest rates, crucial for fostering economic stability and growth.

Attribution: CBE