Egyptians are continuing to convert Egyptian pound bank deposits into US dollars, fearing further depreciation for the embattled currency.
A Central Bank of Egypt report in January revealed that dollar deposits rose to the equivalent of LE218 billion, compared with LE197 billion last November.
Hisham Ezz al-Arab, managing director of the Commercial International Bank, said the trend was growing across the country and would continue if the pound fel further, but declined to divulge the total of US dollar deposits at CIB.
Speaking to Al-Masry Al-Youm, Ezz al-Arab said the trend is not alarming but should still be monitored.
“Control measures applied by the Central Bank have reduced the fall of the Egyptian pound against the dollar,” he said. “It only fell by LE0.03 in February.”
Hisham Okasha, vice president of the National Bank of Egypt, said Egyptian expatriates only remit 30 to 35 percent of their savings in Egyptian pounds and keep the rest in dollar deposits.
Expatriate remittances reached US$19.5 billion by the end of 2012, compared to $12.5 billion in 2011. Meanwhile, the Egyptian pound has fallen 10 percent since the beginning of this year.
In response, the Central Bank ordered banks to raise interest rates on deposits in Egyptian pounds to 12.5 percent.
Edited translation from Al-Masry Al-Youm