The banking sector managed to provide approximately $33.7bn to cover the needs of the state and importers requests for foreign exchange between November 2015 and end of April, according to the governor of the Central Bank of Egypt (CBE) Tarek Amer.
Amer met President Abdel Fattah Al-Sisi on Tuesday to discuss the CBE’s efforts to increase the foreign exchange reserve with more than $1bn in recent months.
According to a statement by the president, Amer said during the meeting that the CBE’s policy is to continue supporting the reserves in order to preserve monetary stability.
“Cancelling restrictions on depositing and transferring foreign exchange in the banking sector has led to doubling the amounts of foreign exchange collected by banks by approximately tenfold; moreover, the economy has become more able to compete in the field of foreign trade,” said Amer.
The CBE supported the government’s direction to offer a number of its companies and some banks on the stock market, in order to make the Egyptian Exchange (EGX) one of the largest stock markets of the emerging markets, he added.
According to the presidential statement, the president has reviewed the agreement approved by the CBE and Ministry of Finance for public offering in the international bond market to support the value of the CBE’s foreign reserves and monetary policy. This agreement would stabilise prices and reduce the budget deficit.
Amer also discussed the CBE’s efforts as well as those of other banks to provide foreign currency to import medicines and their components as well as fuel and gas supplies to provide electrical energy regularly.
During his meeting with the president, Amer stated that the CBE and all banks operating in Egypt are willing to provide all state entities with their US dollar needs, especially the ministry of supply, so as to open letters of credit to import the citizens’ needs.
The banks operating in Egypt managed to provide $33.7bn in cooperation with the CBE, he said. The provided foreign currency was allocated to import the needs of the Egyptian market as well as those of the ministries from November 2015 to April.
He added that the CBE pumped about $15.7bn into banks through regular weekly FX auctions and exceptional bids raised from time to time.
Al-Sisi stressed the importance of continuing efforts to provide the foreign currency to import the needs of citizens in coordination with the Ministry of Supply and Internal Trade to prevent any shortage in commodity or price increase.
Amer also reviewed the results of his recent two-day visit to Abu Dhabi, during which he chaired the annual meeting of the Permanent Bureau of the Board of Governors of Central Banks and Arab Monetary Institutions which was organised by the Arab Monetary Fund.
Several issues were discussed at the meeting: most notably the development of credit information in small and medium-sized enterprises (SME) and the establishment of a regional system for clearing and settling Arab inter-payments, Amer mentioned. They also tackled the proposed issues to be included in the unified Arab discourse of 2016 at the annual meetings of the International Monetary Fund (IMF) and the World Bank to be held in October. In addition, the meeting reviewed the launch of an Arab Day of Financial Inclusion on April 27 to promote awareness of obtaining finance issues and financial services.
Al-Sisi continued the ongoing efforts to promote Arab cooperation in the banking sector, noting that strengthening such cooperation would contribute to the support of vital economic sectors and push forward the comprehensive development process.