Egypt’s two largest state-owned banks, the National Bank of Egypt (NBE) and Banque Misr, have suspended the issuance of high-yield savings certificates offering returns of up to 27%, and have lowered interest rates on other savings products by up to 2.25%.

The move follows the Central Bank of Egypt’s recent decision to ease monetary policy for the first time in four years.

After around 15 months on the market, the National Bank of Egypt — Egypt’s largest bank by assets — has ended its offering of certificates with annual returns of 23% (paid daily), 23.5% (paid monthly), and 27% (paid annually).

Additionally, the bank cut the interest rate on its 3-year certificates by 2%, according to a statement from CEO Mohamed El-Etreby.

Banque Misr, the country’s second-largest state lender, followed suit by halting its high-yield certificates and implementing a larger rate cut of 2.25% on its 3-year savings products.

The decisions come shortly after the Central Bank of Egypt reduced its key interest rate by 225 basis points last Thursday.

The central bank’s move was influenced by a sharp deceleration in urban inflation, which dropped from 24% in January to 12.8% in February, before slightly increasing to 13.6% in March.

In January 2024, NBE and Banque Misr launched one-year fixed-rate certificates with returns of 23.5% (monthly) and 27% (annually) to absorb liquidity, particularly as previous certificates offering 22.5% and 25% matured. These high-yield products attracted approximately EGP 1.3 trillion, including EGP 888 billion at NBE alone, according to El-Etreby.

The 3-year tiered-yield certificates were introduced following a 600 basis point interest rate hike by the Central Bank in March 2024, aimed at mitigating inflationary pressures resulting from the fourth round of currency devaluation.