The Clap
The CBE is withdrawing around EGP 100 billion from the market for the second consecutive time using deposits through open market operations (OMO) with an 11.75% return.
What are OMOs?
Decreasing excess liquidity happens when the CBE issues securities that banks buy with their excess funds, which reduces the money supply in the market as well as inflation.
Not the First Time
The CBE previously gathered EGP 100 billion in liquidity from the market by issuing the largest 3-month treasury bills in its history.
Why this Matters
Inflation in Egypt rose to 13.6% in July 2022, and the CBE fixed the interest rate at 11.25% for deposits and 12.25% for loans, and 11.75% as the main interest price.
CBE decreases market liquidity 💸
