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EBRD cooperates with CBE to support liquidity in Egypt’s capital markets - Daily News Egypt

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EBRD cooperates with CBE to support liquidity in Egypt’s capital markets

Bank helps with restructuring Nilex, says Fink

The European Bank for Reconstruction and Development (EBRD) is cooperating with several entities in Egypt to increase liquidity in the country’s debt markets and encourage capital raising by small and medium-sized enterprises (SMEs), Christelle Fink, EBRD’s associate director for local currency and capital markets development, said.

These entities include the Central Bank of Egypt (CBE), the ministry of finance, the Financial Regulatory Authority (FRA), and the Egyptian Exchange (EGX).

“We are also supporting the EGX with the restructuring of the Nilex and the recreation of the EGX SME platform, helping define an optimal set-up,” Fink told Daily News Egypt.

The restructuring of the Nilex is very important because Egypt has a deep pool of smaller companies that are the driving force behind economic growth, she added.

The EBRD works with the aforementioned entities to help model the sovereign yield curve in the Egyptian pound, she noted, adding, “the new curve once published will constitute an important turning point in the development of debt capital markets in local currency in Egypt.”

The bank is also cooperating with the CBE to consolidate government securities into the recently established CBE depository, she said, adding, “Once fully functional, the settlement and safekeeping of government bills and bonds will be in a single depository, offering market participants more efficient collateral and repo operations.”

She also recalled that earlier in October 2018 the bank presented an assessment and recommendations for developing the private equity and venture capital sector Egypt, in the presence of the Minister of Investment and International Cooperation, Sahar Nasr.

The EBRD’s investments in Egypt are estimated at €4.8bn ($5.4bn) over about 91 projects, while 56% of the portfolio is for the private sector, according to the bank’s official website. The bank focuses on modernising Egypt’s financial sector, developing the agribusiness sector, municipal and infrastructure projects, in addition to upgrading transport and telecommunications services.

Furthermore, the EBRD also focuses on strengthening governance in Egypt. In close cooperation with international financial institutions, the EBRD will contribute toward improving governance in the public and private sector. The bank will also provide capacity-building for relevant institutions to improve competition, promote investment, and policy delivery, according to the bank’s website.

Supporting the competitiveness of Egypt’s private sector is one of the bank’s focus areas in Egypt, added the website, noting that the bank is keen on stronger value chains, improving access to finance for SMEs, better economic integration, and increasing opportunities for women and young people.

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