Central Bank of Egypt’s Amer promotes reform journey in IIF speech
Egypt’s banking sector has a lot of upside potential — and the way forward is to continue enacting structural reforms,Central Bank of Egypt (CBE) Governor Tarek Amer said during a keynote speech at the Institute of International Finance (IIF) annual meeting in Washington (watch, runtime: 23:35). Amer noted that the CBE has been implementing its own structural changes and is pushing to improve regulation of the sector with the Banking and Central Bank Act, which received cabinet approval earlier this month. Improved regulation will leverage Egypt’s position to bring more financial services to the economy, Amer said, noting that Egypt’s banking penetration rate is currently only at 32%.
Egypt’s economic fundamentals have “turned around quickly and dramatically,” helping to change the position of an economy “that has a lot to offer,” he said. Although the full results of reforms are yet to show, economic indicators are on the rebound and the correct foundation for growth is now in place, Amer said.
Domestic investors are to thank for successful FX reforms: Egypt now has the confidence of international investors, “but we have been relying more on regaining the confidence of the domestic market,” Amer said. The bulk of FX inflows to the Egyptian banking system have come from local players, helping the country’s foreign exchange reserves to recover to record highs.
Nothing new on IMF post-program agreement talks: The nearly-complete IMF program has “achieved is objective, and more,” and Egypt “is eager to continue using the expertise of the fund in one way or another,” Amer said in response to a question about the expected post-program agreement with the lender.