For the fourth week in a row, “the Central Bank of Egypt” withdraws 100 billion pounds from banks’ liquidity
For the fourth week in a row, “the Central Bank of Egypt” withdraws 100 billion pounds from banks’ liquidity. Egyptian banks offer 11.4% of their deposits in pounds in the weekly liquidity auction, with a return of 11.75%. Egyptian Banks rush comes to display the largest possible amount of liquidity in the central bid to take advantage of the largest possible return within the shortest time, in light of their anticipation of an expected rise in interest rates during the next central meeting September 22. We strongly believe that what happened yesterday confirms the presence of strong liquidity in the banks and interest in the high interest in the weekly bid for the shortest possible period in anticipation of raising interest rates. The banks are certain to raise interest, perhaps even before the upcoming September 22 meeting. (Hapi Journal & Zilla Capital)
- The Egyptian government believes that the flexible exchange rate will be "beneficial for the economy," according to Al-Saeed's statements yesterday.
The government would back further EGP depreciation the minister said, following weeks of speculation that CBE Governor Hassan Abdalla will gradually allow for more flexibility in the EGP exchange rate in a bid to secure new IMF assistance. Al-Saeed said the government is working to increase foreign exchange receipts through foreign direct investment, exports, and workers' remittances from abroad. "We as a government agree that a flexible exchange rate is definitely good for the economy," she added. Egypt is currently negotiating a loan from the International Monetary Fund, which favors a flexible exchange rate. Talks of further devaluation pushed the Egyptian pound to its lowest level since December 2016 in the foreign market the week before. Even after devaluing it by about 15% in March, the currency still needs to depreciate further to reduce Egypt's funding gap. (Al Mal & Zilla Capital)
- The Central Bank of Egypt raises the limit on companies’ borrowing from government banks by 100%.
The CBE increased the maximum limit for government banks to lend to companies by 100% reaching 500 million pounds without referring to it, with the aim of helping companies expand their business. Noting that the maximum limit for corporate lending have been 250 million pounds, provided that prior approval is obtained from the Central Bank in case the lending limit exceeds this amount. The new decision comes after it canceled last month the maximum deposit limit, whether individuals or companies, in banks operating in Egypt, and raised the maximum daily cash withdrawals for individuals and companies by 200% to 150 thousand pounds per day, and after reopening documentary credits to importers Once again, after a long pause since the Russian-Ukrainian crisis, the hard currency is scarce. (Business Asharq)
- Importers to heave a sigh of relief on new customs regulations in Egypt.
Egypt has announced new regulations to rally the country’s trade balance and finally ease the release of the imports that have been accumulating for months now across the nation’s ports. On September 4th, Egyptian Minister of Finance Mohamed Maait issued a resolution regulating some provisions of the presidential decree no. 218 of 2022 on the current customs duties, which include cutting the import tax on more than 150 items of production supplies and inputs. (Hapi Journal)
- This also comes in light of a strong appeal by importers calling the CBE to loosen those rules requiring them to use Letters of Credit (L/Cs) to purchase non-essential goods.
Instead of the previous system of documentary collection — a move that has made it almost impossible for companies in a number of sectors to import goods. The amendments have been endorsed by industry experts and sources Arab Finance talked with. Thus, the aftermath of the decision should soon reverberate and be felt across the whole supply chain, from tipping off the trade balance to embracing new shipments and perhaps eventually tapering down inflation and price hikes. This will inevitably place Egypt back on the investment map, boosting the country’s economic stability and attracting foreign investments once more. (Zilla capital)
- 6 EGX-listed companies decide to merge.
Emerald Real Estate Investment (EMRI), Edge Development and Project Management, Emerald Development and Projects Management (EMDE), Odin for Investment and Development (ODID), and Odin for Investment and Real Estate agreed to be merged with Egyptians for Housing and Development Company (EHDR). The capital of the merged companies will be distributed among shareholders of all the mentioned companies. Egyptians for Housing operates in the real estate development and investment sector, with a focus on buying, purchasing, dividing, and selling lands, and establishing buildings and facilities.
- Egypt proceeds with financing arrangement for new social protection packages.
The Egyptian Ministry of Finance is currently executing the Presidential directives regarding the appropriation bill to fulfil the key needs of citizens and arranging the required financing for new social protection packages. This move will mitigate the impacts of the current global crisis on the Egyptian economy, improve the livelihoods of citizens, and support food security for the neediest households. (Al Mal)
- Egypt-Saudi Arabia trade exchange jumps 41% YoY in 2021.
Trade exchange between Egypt and Saudi Arabia grew by 41% year-on-year (YoY) in 2021. The trade exchange between the two countries amounted to 4.57 billion USD in 2021, compared to 3.236 billion USD in 2020. Egypt welcomes more investments by Saudi companies in various sectors and aims to build industrial partnerships between the private sectors of both countries. It is noteworthy that Saudi Arabia seeks to achieve industrial and investment integration with Egypt. (Al Mal)
- TSFE contributes to attracting 5.4 billion EGP investments to economy.
Egyptian Minister of Planning and Economic Development Hala El-Said revealed that each 1 billion EGP invested by the Sovereign Fund of Egypt (TSFE) contributes to attracting investments worth around 5.4 billion EGP to the economy. TSFE targets investments in facilities, infrastructure, desalination plants, and green hydrogen projects, along with establishing sub-funds for the offerings and the management and restructuring of assets with multiple issues. (Arab Finance)
- Americana Group eyes further expansion in Egypt.
Kuwait-based Americana Group is considering further expansion in the Egyptian market. The Egyptian unit of the group, Americana Egypt, is planning to add new production lines with around 26 million USD in investments. Investment opportunities have been discussed to support the Egyptian economy, as well as possible alternatives across operations as the group targets exporting its products, mainly to the GCC states. The group would be fully supported to implement its expansion plans to develop existing investments in the food production industry in Egypt. (Arab Finance)
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