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Rate cut to inject EGP 100bn into market – Banking official

Rate cut to inject EGP 100bn into market – Banking official
The Ministry of Finance could save up to EGP 30 billion from this decision

Cairo – Mubasher: The Central Bank of Egypt’s (CBE) decision to cut interest rates by 300 basis points is expected to provide the market with liquidity of more than EGP 100 billion, a banking source told the Middle East News Agency (MENA) on Tuesday.

Borrowing government entities such as the Ministry of Finance could save up to EGP 30 billion as a result of this decision, the source added, noting that the ministry’s annual loans reach about EGP 800 billion.

In addition, other state-run bodies such as the electricity and petroleum service providers with loans amounting to EGP 400 billion would also benefit from this interest rate cut.

Slashing interest rates by 3% will also help reduce the cost of financing for many companies and individuals with non-performing loans, the source pointed out. 

Loan portfolio at public- and private-sector banks, excluding the CBE, amounted to EGP 1.9 trillion, he added, noting that about EGP 60 billion will be saved as a result of the rate cut to be then pumped into the market.