The Central Bank of Egypt (CBE) absorbed 13.5 billion Egyptian pounds, about $270 million, of local-currency liquidity from the banking system through an open-market operation on 9 June 2026, and changed the rules governing its main deposit operations.
The operation was carried out at an interest rate of 19.5%, with two banks taking part. Open-market deposit operations form part of the CBE's liquidity management instruments, through which the central bank absorbs surplus liquidity from banks in support of its monetary policy stance.
CHANGE TO AUCTION RULES
The CBE revised the terms of its main open-market deposit operations. Until now, these operations were conducted through weekly fixed-rate auctions, with bids allotted in proportion to each bank's share of total submissions. Under the new arrangement, all bids submitted by participating banks will be accepted, replacing the proportional allocation system.
The central bank said the change was intended to align its practices with international standards for managing liquidity surpluses and to improve the transmission of its monetary policy decisions. It will also publish the results of each deposit operation on its website, with the aim of increasing transparency and allowing closer monitoring of liquidity developments in the banking system.
POLICY BACKDROP
The change in operating procedures comes after the CBE left its key interest rates unchanged at its monetary policy meeting on 21 May. Moving from pro-rata allotment to full acceptance of bids means that the amount each participating bank places with the central bank in a deposit operation is no longer scaled back according to its share of total demand, so banks' bids are met in full.