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Thursday, 10 September 2020

Ahmed Moussa interviews CBE governor Tarek Amer on last night’s talk shows

CBE governor Tarek Amer gave a marathon interview to Ala Mas’ouleety’s Ahmed Moussa last night, sitting down for over two hours to talk about everything econ you can think of (watch, runtime: 2:19:42). Here are the highlights:

More reform is in the pipeline: Amer touched on a range of initiatives now in the pipeline, among them new exchanges for commodities and futures. The country hopes to improve financial inclusion by encouraging development of the non-bank financial services and fintech sectors, he added, and is hoping to draw in more foreign investment by implementing tax reforms to make the business climate more appealing for investors.

Are tough economic reforms translating into stability? As you might expect, Amer spent a significant chunk of airtime reminding the public at large that the Sisi administration’s commitment to the 2016 economic reform program has enabled Egypt to weather the worst of the covid-19 pandemic. The CBE had only USD 800 mn in cash reserves in 2015, rising to more than USD 45 bn by February this year. This meant that Egypt was able to meet some USD 35 bn of its liabilities during the covid-19 pandemic, without seeing a drastic decline of its foreign reserves stockpile, Amer said.

Holding the line on the EGP: While many countries were forced to devalue their currencies, sometimes by as much as 20-30%, Egypt has seen the value of the EGP rise against the USD by around 1.4% so far this year, Amer noted.

The government isn’t going to extend its six-month freeze on debt repayment, Amer said. This will mean that tourism companies, hotels and private airlines will need to start paying down their debts again from October. Amer also recapped other covid-19 stimulus measures enacted to salvage businesses and the economy.

Egyptians have now invested EGP 380 bn into the 15% savings certificates offered by the National Bank of Egypt and Banque Misr, he said. The high-yield certificates of deposit were launched earlier this year to dissuade savers from rushing into the USD.

Egypt has no need to return cap in hand to the IMF, having secured USD 9 bn in emergency funding from the fund already this year, Amer said.

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