Egyptian banking sector is strong, resilient in face of currency decline: Expert

CAIRO - 18 January 2023: Economist, Khaled El-Shafei, said that the Central Bank’s directions are clear and seek to stabilize exchange conditions, provide foreign currencies, and control the monetary system in the country. There is a clear strength of the banking sector, and the Central Bank of Egypt has succeeded in all these tasks since 2016, during the first decision to liberalize the exchange rate.

 

He indicated that the compulsory reserve ratios for all Egyptian banks are in a good position, especially since there are decisions from 2017 to increase the compulsory reserve ratios from 4% to reach 14%, which puts banks in a better position.

 

He explained that the Central Bank succeeded, after liberalizing the exchange rate, in increasing the cash reserves and controlling exchange rates, as well as using the interest paper to control inflation, so foreign investment began to feel the stability of things in the country, especially after a period of difficult currency disturbances before the decision to float, and the presence of two prices for different currencies had negative effects.  

 

He stressed that there is an enrichment in banking life, and there were decisions by the Central Bank to open free accounts as a step on the right path and generalize financial inclusion, because the Egyptian market is very huge, explaining that banks do not face a deficit in dealing with individuals, but rather seek to expand, whether in retail banking or finding New dealers, and banks seek to enlarge their customer base in order to reduce the large risks that arise from a small number of customers, or the so-called large customers, or the only segment on which the bank relies in achieving new profits.

 

And he continued, that the Central Bank is striving with all force to revitalize the performance of the economy, the banking sector, and electronic payment activities.