Egypt takes significant steps to deepen its money, derivatives, and capital markets

By Nibal Zgheib


  • Central Bank of Egypt introduces CONIA, the Cairo Overnight Interbank Average benchmark
  • CONIA will enhance development of new products, leading to a more resilient financial system
  • The benchmark will be published starting October 2019
  • EBRD supported innovation that promotes capital and money markets reform

The Central Bank of Egypt has made significant headway in furthering the development of its money, derivatives, and capital markets. One of the significant steps taken which will lay the foundation for the enhancement and the improved efficiency of the market, is the introduction of a risk-free interest rate benchmark.  This move is in line with the international movement towards developing risk free rates as the -IBOR benchmarks are being phased out.

The new benchmark, the Cairo Overnight Interbank Average (CONIA), was developed by the Egyptian Money Market Contact Group (MMCG), which brings together the central bank, commercial banks and the European Bank for Reconstruction and Development (EBRD). 

CONIA reflects rates on interbank transactions that are virtually risk free because of their very short tenors.

Rami Abulnaga, Sub-Governor for Markets and External relations at the Central Bank of Egypt, welcomed the introduction of CONIA as “an important milestone to support money market reform that is consistent with CBE senior management’s vision”. EBRD Treasurer Axel van Nederveen said it made an important contribution towards the development of the Egyptian financial markets. Similar Risk-Free Rates had already been developed for major currencies in other monetary jurisdictions, he noted.

The transparency and robustness of the benchmark will support the development of a broader set of products for financial sector participants and improve the resilience of the capital markets and the overall economy. 

The Egyptian Money Market Contact Group was set-up in 2018 to promote safe and efficient local currency money markets.

Following the introduction of CONIA, the group will now focus on developing instruments that will use CONIA. It will also work to enhance domestic money markets and to ensure that CONIA continues to provide an accurate reflection of underlying market conditions. 

The central bank launched CONIA today at a workshop in Cairo that also included a panel discussion on international reforms to the London Interbank Offered Rate (LIBOR), led by the EBRD.