Monday,16 July, 2018
Current issue | Issue 1289, (31 March - 6 April 2016)
Monday,16 July, 2018
Issue 1289, (31 March - 6 April 2016)

Ahram Weekly

Candid Amer

Candid Amer
Candid Amer
Al-Ahram Weekly

IN A TELEVISION interview earlier this week, Central Bank of Egypt (CBE) Governor Tarek Amer spoke about the recent devaluation of the pound and expressed optimism about the health of the Egyptian economy. He also made announcements regarding upcoming privatisations in the banking sector and elsewhere.

Amer’s interview, with anchor Lamees Al-Hadidi on the satellite TV station CBC, was the talk of town and included news of important policy changes and financial updates, including:

Ÿ 20 per cent of Banque du Caire will be floated before the end of the year;

Ÿ 40 per cent of the Arab African International Bank, jointly owned by the CBE and the Kuwait Investment Authority, will be privatised in 2016;

Ÿ The United Bank, wholly owned by the CBE, will be divested to a strategic investor in 2016;

Ÿ The CBE’s authority will extend to the general assemblies of the banks, and the CBE will have the authority to change boards of directors. The CBE earlier issued regulations limiting the tenure of bank chairmen to a maximum of nine years, upsetting the banking community as it will mean the dismissal of eight veteran figures, including Hisham Ezz Al-Arab, head of the Commercial International Bank, Egypt’s largest private-sector bank. Senior bankers have said that the decision constitutes interference in the banks’ internal affairs and that such decisions should be made by the general assemblies of the banks concerned;

Ÿ Dollar deposits increased by 2,130 per cent after the devaluation of the pound on 14 March;

Ÿ Foreign portfolio investments in Egyptian treasury bills are expected to reach $20 billion by the end of this year. Investment in treasury bills and bonds has increased by $500 million since the devaluation three weeks ago;

Ÿ A loan from the IMF is on the table but will be on Egypt’s terms. According to experts, however, there is no such thing as “Egypt’s terms,” and the loan will need to be approved based on a reform programme signed off by both parties;

Ÿ Egypt is committed to paying its dues and will pay $1 billion to Qatar in July and $800 million to the Paris Club in the same month. “July will be a difficult month, but we are ready,” Amer said;

Ÿ The Principal Bank for Development and Agricultural Credit will be brought in under the umbrella of the CBE;

Ÿ The recently launched dollar-denominated high-yield baladi certificates, aimed at attracting the hard currency savings of Egyptians living abroad, have thus far only attracted around $150 million. Similar certificates in 2012 brought in $400 million;

Ÿ Foreign investment funds are expected to invest “at least $5 billion” in Egypt “in three to four months”;

Ÿ The CBE has kept hard currency reserves stable at around $16.5 billion through “swap agreements and loans from international banks”, as well as dollar deposits from local banks;

Ÿ $22 billion has been pumped into the market to clear import backlogs since last November; and

Ÿ There is no currency crisis, Amer said, but there is a crisis in the regulation of the currency market.

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