The Coordinating Council, specialised in coordinating between the financial and monetary policies, is set to discuss on Sunday raising the maximum limit for foreign deposits at banks for companies while maintaining the limit for individuals, according to a high-level official.
The Central Bank of Egypt (CBE) introduced a $10,000 daily and $50,000 monthly cap for foreign deposits at banks for both individuals and companies last February.
This decision came among a number of decisions taken by CBE in 2015 that aimed to regulate import operations and decrease demand on the dollar in the official and black markets.
CBE faced major backlash from the business community due to the decision, in particular from importers of the non-essential goods, since it limited their ability to fund import operations they were undertaking before the decision. This is especially since banks do not provide funding to support importing such goods.
According to the official in statements to Daily News Egypt, the extraordinary meeting of the Coordinating Council is set to discuss a number of issues, alongside the cap on deposits. At the top of the meeting’s agenda come the dollar exchange rate against the pound, the pound’s interest rates, and the procedures recently approved by CBE to limit imports.
The meeting is also scheduled to discuss the programme agreed upon between the government and the CBE during the council’s first meeting on 17 December. The programme aims to achieve macro-economic stability and to encourage economic growth, increase local production, and create jobs.
The programme includes working towards lowering the country’s general budget deficit to sustainable levels to alleviate the pressure on local liquidity and offer more resources to the economic sectors. This is expected to lead to increasing local production and consequently alleviating inflationary pressures.
The programme also includes maintaining price stability by avoiding inflation of over 10% rates in the medium-term. This is in addition to reducing the country’s trade deficit by setting a strategy that aims to push and increase local production to meet market needs. In addition, the programme aims to continue the structural reforms that target increasing the non-inflationary GDP and overcome the obstacles that limit the increase of investments.
The official said the council will further discuss two new initiatives that CBE is expected to launch, the first to re-operate faltering projects and the second to encourage local industry.
The Coordinating Council was established in 2005 and was reformed by a presidential decree on 26 November 2015.
The council is headed by the Prime Minister and includes the Governor of CBE and the ministers of Investment, Finance, and Trade and Industry.
The council also includes highly-experienced members, such as former CBE governor Farouk Okda, international economic expert Mohamed El-Erian, and Head of the Council of Economic Development, affiliated to the presidency, Abla Abdel Lateef.