CAIRO -

Economic and financial experts say that the Egyptian government has succeeded in achieving several goals from the certificate of 22.5% and 25%, which it recently presented, while the gains of buyers depend on the extent of the stability of inflation rates and interest rates over the next year.

The certificate was offered in its two categories through the National Bank of Egypt and Banque Misr (governmental), and it was the highest historically in terms of the interest rate of 25% for the annual return and 22.5% for the monthly return, with the aim of curbing inflation rates and supporting the economy, according to what was confirmed by the President of Banque Misr, Mohamed El-Atreby. .

Al-Atribi said in a televised intervention that determining the period for selling this certificate is limited, because the two banks will bear the large interest differences, indicating that the two banks can borrow from institutions with an interest rate not exceeding 17.5%, yet they decided to bear the interest differences in order to advance the economy and curb inflation.

Certificates achieved their goals

On January 24, Al-Atribi said in a statement that the certificates had achieved their goals, indicating that they had collected 160 billion pounds ($5.30 billion). The National Bank also issued a statement on the same day confirming the collection of up to 260 billion pounds ($8.70 billion). dollars) to date.

The Egyptian newspaper, Al-Osboa, quoted sources within the two banks as saying that the final proceeds as of January 30 amounted to 465 billion pounds, with 293 billion for the National Bank and 172 billion for Banque Misr (the dollar equals 30 pounds).

There are disagreements among analysts regarding the goals that the government says it has achieved from these certificates, as the former Undersecretary of the Egyptian Ministry of Trade for Economic Research, Dr. Monetary policy, which means keeping interest rates in line with inflation.

Abdul Muttalib told Al-Jazeera Net that inflation rates are currently close to 22% and are expected to reach 25%, meaning that interest has exceeded inflation rates, as requested by the Fund.

Abdel Muttalib believes that these certificates were also aimed at reducing the volume of consumption and withdrawing liquidity from the market, but he believes that it is a goal that is difficult to achieve after the majority of liquidity has turned into cash containers inside banks, and Egyptians no longer have money hoarded in homes.

As for the other goal, in the opinion of the speaker, it is to withdraw quantities of liquidity from other banks and deposit them in the Banks of Egypt and the National Bank, a goal that has been actually achieved, in his opinion.

Abdel Muttalib believes that these funds will support the government's ability to bridge the current budget deficit, which will reinforce the IMF's conviction of Egypt's ability to bridge the current budget deficit (which amounts to 558.2 billion pounds) without resorting to external borrowing or issuing bonds, which reflects the strength of the economy.

There is another benefit also achieved by the government, as Abdul Muttalib says, which is that it guaranteed dealing with this liquidity for a period of 6 months in principle, as it is impossible to break it and recover it during this period, and if the holder of the certificate decides to break it after this period and before the end of the year, he will lose 10% of its original value. He will not receive any interest for the elapsed period.

The main reason for the decline in sales of recent certificates is the instability of the exchange rate (Reuters)

Have the goals been achieved?

The Egyptian economist, Mamdouh Al-Wali, agrees with what Abdel-Muttalib said about the failure of the certificates to withdraw large amounts of liquidity outside the banks, as evidenced by the fact that they represent about a third of Banque Misr’s certificate sales and half of the National Bank’s sales, while the remainder came from breaking old deposits.

In a statement to Al-Jazeera Net, Al-Wali said that what was collected through these certificates was less than what was collected from the 18% certificates last year, which amounted to 750 billion pounds, indicating that the main reason for the decline in sales of recent certificates was the instability of the exchange rate.

Al-Wali expected that the government would issue new certificates with higher interest if the Central Bank meeting scheduled for next Thursday decided to raise the interest rate again due to the increase in inflation.

In addition, the Vice President of the National Bank of Egypt, Yahya Aboul Fotouh, said in press statements on January 21 that many depositors broke old deposits or abandoned dollar deposits to invest in these certificates denominated in Egyptian pounds.

Who benefits?

Dr. Fouad Shaker, former agent of the Central Bank of Egypt and former head of the Federation of Arab Banks, said that the certificates will benefit banks and the government, but they will not benefit their holders in the event of an increase in inflation rates.

Shaker explained in a statement to Al-Jazeera Net that the banks obtained large amounts of liquidity that the government will use to bridge many aspects of the deficit, but when the time comes to recover the value of the certificate and its benefits, inflation rates and interest rates will be much higher than today, and therefore the purchasing power of the value of the certificate and its benefits will be less. than or equal to the original amount that was paid in the certificate today, meaning that he did not earn anything.

The financial expert concluded by saying that any economist in the world knows that the citizen will not benefit from any deposit, whatever its interest, as long as inflation rates and interest rates are likely to exceed this interest stipulated at the time of deposit, stressing that inflation and interest rates will increase, because Egypt is going through an economic shock that it is not ready for. .