The governor of the Central Bank of Egypt (CBE) Farouk Al-Oqda denied tendering his resignation after attending the cabinet’s economic committee meeting Sunday.
Rumours concerning the resignation of Al-Oqda spread after President Morsy’s meeting with Hisham Ramez, deputy governor of the CBE.
State TV reported Saturday that Al-Oqda resigned and that he will be replaced by his deputy, the vice chairman and the managing director at Commercial International Bank (CIB), Hisham Ramez.
Over the past week, rumours have circulated that Al-Oqda submitted his resignation allegedly because “he does not want to remain in office after the end of the year.”
Despite the Al-Oqda’s refutation, the rumours cast shadows on the foreign exchange market, especially the US Dollar which rose significantly on account of the news of his resignation.
“They are all rumours, it can’t be true because when a highly ranking official resigns it must be done through customary procedures, and he must be honoured”, said Osama Al-Manyalawy assistant treasury manager at the Arab Banking Corporation (ABC).
“There are political conflicts behind the rumours” confirmed Al-Manyalawy noting that people belonging to the old regime may be spreading such rumours to restore their power.
“If the resignation is true, the substitute will be ready to take over immediately leaving no void, and it will be conforming to the protocol, in this case the exchange rate won’t be affected,” he added. “There are many competent people at the central bank, namely the deputies, who are ready to fill in the vacancy.”
On whether Ramez could substitute Al-Oqda, Al-Manyalawy answered, “He fits in the place of CBE governor. He was a dealer; he worked in the dealing room, he knows how to manage the foreign exchange market and avoid problems. He is specialised in the field that Egypt needs right now.”
“The rumours have denied, it definitely impacted the exchange rate though,” said Tarek Metwally assistant managing director, Institutional Banking at Blom Bank Egypt, “Al-Oqda is one of the key figures of the Egyptian economy, he managed throughout the financial crisis in 2008 and after the revolution. He is a trustworthy figure whose resignation may have a major impact.”
Metwally added, “his policies and administration proved to be efficient. When nothing in Egypt seems to work well, CBE is a place where things are to some extent working better,” mentioning that the outside world trusts his policies.
He said, “the alternatives are always available, there is no professional institution that relies only on one person, but when there is someone who is reliable he is considered as an added value. The political administration is trying to find a new figure, the important thing is to limit the change to figures and not policies, Ramez worked with Al-Oqda and they put policies together.”
The banking expert stated that if the CBE governor is replaced by someone from a different school of thought, it will augment the already existing confusion in the political management, and that “time is our enemy.”
Metwally continued, “Choosing someone from Al-Oqda’s school is a message to the world that the policies are stable, you replace a person that we trust in his policies by someone who will adopt the same policies.” He added, “what I care most about is the policies and not the individuals; the free market and the wise administration, we cannot change the people and the policies in such difficult times.”
“We all know that Al-Oqda has already submitted a resignation, and that he is tired, but he can’t leave right now”, he concluded, “Change is good and healthy, but when?”