LEGISLATION WATCH- Banking Act will be ready in June: The Banking Act will be ready and presented to the Ismail Cabinet on 1 June, CBE Governor Tarek Amer said in at workshop on the economy held by Al Ahram. The law would reduce the power of the CBE governor by giving the central bank’s board expanded oversight powers, said Amer. He did not speak on the ways the law would impact banks beyond reiterating that the CBE would have expanded an regulatory role. Amer had previously said that the law would give the CBE greater teeth in regulating boards at banks, but that it no longer contained provisions to limit the terms of bank managing directors. A tithe on bank profits to benefit an industry development fund has also been scrapped.

Amer noted that total inflows reached USD 120 bn since the EGP float, including portfolio investment, foreign direct investment, tourism receipts and remittances. Portfolio inflows reached a total of USD 35 bn, with inflows into Egypt’s sovereign debt over the last period rising to USD 25 bn, with some USD 10 bn having been invested in the stock market, he added.

Exchange rate against greenback stable and CBE doesn’t want to have to prop up the EGP: Inflows have helped keep the FX rate stable, the governor said, adding that strong reserves allow foreign companies to repatriate profits. He warned that while the CBE has no intention of manipulating the exchange market, it could step in if rates get out of control.

It’s the second time in less than two weeks that Amer has mused about intervening in the FX markets if the exchange rate goes out of an ‘acceptable’ corridor (see the second paragraph of Last Night’s Talk Shows on 8 May, here.)

His comments yesterday came as remittances from Egyptian expatriates rose 11.6% y-o-y to USD 2 bn in February 2018, compared to USD 1.8 bn in February 2017, the central bank said yesterday (pdf). Remittances recorded USD 17.3 bn during the eight months from July 2017 to February 2018, marking a 24.1% increase from the same period a year earlier.

On foreign debt, Egypt plans to pay international oil companies USD 850 mn, said Amer without noting the timeline for the disbursement. Oil Ministry sources had stated earlier this month that Egypt will pay IOCs USD 200 mn in June. Amer stated that the country’s overall debt levels are within comfortable bounds, saying that while Egypt’s debt is growing, so is the economy. What’s helping keep the situation stable are the fact these debts are long-term, ranging from 15-60 years.