(MENAFN- Daily News Egypt) The foreign deposits growth rate in banks in the Egyptian market jumped to 13.9% in March 2015, compared to 8.1% the preceding February, an increase of 5.8%, according to the Central Bank of Egypt (CBE).
According to the CBE, deposits in foreign currencies in the Egyptian banking sector increased from the equivalent of EGP 247.968bn in February to the equivalent of EGP 262.473bn in March.
In a CBE statement on Monday, foreign currency deposits accounted for 18.29% of total bank deposits during March, compared to 17.9% the preceding February.
"This great increase in foreign currency deposits in the Egyptian banking sector goes back to a number of banks raising interest rates on foreign currency savings as they seek to attract savings in those currencies," said Tamer Youssef, Head of Treasury & Capital Markets at a foreign bank operating in Egypt.
"In March, the family sector raised its foreign currency savings by the equivalent of EGP 10.581bn, as it reached the equivalent of EGP 163.055bn against EGP 152.474bn in February. This indicates the banks' success in attracting this sector's savings through raising interest rate on them," said Youssef. "There is another explanation to the increase of foreign currency savings in banks operating in the Egyptian market."
He added: "It may be the result of liquidation of Dollar stocks in the Egyptian Stock Exchange during March, in light of the declines witnessed by the stock market and the deposit of the value of those shares in the form of bank deposits."
The CBE's numbers also revealed an increase in total deposits in banks during March valued at EGP 48.101bn. The deposits reached EGP 1,663.797bn, against EGP 1,615.696bn the preceding February.
"The great increase in the total deposits in the Egyptian banking sectors goes back mainly to the increase in family sector savings which accounts for 75.7% of total bank savings" said Ahmed El-Khouly, head of Treasury at the Housing & Development Bank (HDB).
The family sector's savings jumped during March to EGP 1,062.607bn against EGP 1,037.893bn in February, with an increase of EGP 24.714bn, according to the CBE.
This sector, according to El-Khouly, is still worried about investing their money outside banks, as they lack alternative opportunities for employing their savings.
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