Home Tags Posts tagged with "CBE"
Tag:

CBE

AfricaBanking, Finance & InvestmentEconomyEgyptNewsNorth AfricaNorthern AfricaUncategorized

Egypt’s central bank keeps interest rates unchanged for the third time in a row

by Radarr Africa
written by Radarr Africa

Egypt’s central bank (CBE) has on Thursday kept its key interest rates unchanged for the third time in a row.

The central bank’s Monetary Policy Committee (MPC) has maintained its overnight lending rate at 11.25 percent, its overnight deposit rate at 12.25 percent, and discount rate at 11.75 percent.

MPC kept its rates on hold at its last two meetings, on June 23 and August 18, but raised them by 200 bps in May, saying it was seeking to curb inflation expectations after prices soared by their fastest in three years.

The CBE also decided to increase the required reserve ratio to 18 percent from 14 percent.

“This works as a catalyst, complementing the tightening stance that the CBE is maintaining, by calibrating liquidity conditions.” MPC said in a statement.

The MPC said it concurs that “the current key CBE rates coupled with the increased required reserve ratio are consistent with achieving price stability over the medium term.”

ALSO READ: Booking.com no longer supports Egyptian Pound

“Noting that the previous tightening policy rates by 300bps is still transmitting through the economy, the MPC will continue to assess the impact on inflation expectations and other macroeconomic developments over the medium term.”

“The elevated annual headline inflation rate will continue to be temporarily tolerated above the CBE’s pre-announced target of 7 percent (±2 percentage points) on average in 2022 Q4. The CBE remains committed to achieving low and stable levels of inflation over the medium term which is a requisite condition towards sustainable economic growth.”

Source: Amwal al ghad

0 comment
0 FacebookTwitterPinterestEmail
Banking, Finance & InvestmentEconomyEthiopia

Central bank of Ethiopia is deliberating on taking bankers’ non-performing loans off balance sheet

by Radarr Africa
written by Radarr Africa

The National Bank of Ethiopia (NBE) is deliberating on taking bankers’ non-performing loans (NPL) in Tigray off the banks’ balance sheets. The bank is working with the Ethiopian Bankers Association (EBA) to identify projects and loans caught up in the war in northern Ethiopia.

Leading banks, especially the state-owned Commercial Bank of Ethiopia (CBE), Wegagen bank, and others, has been reporting significant loans extended for Tigray up until the war broke out in November 2020. They were unable to collect because of the conflict. Except for over 10 new banks that have joined the market in the last two years, all commercial banks have a presence in Tigray, accounting for seven percent of the over 8000 bank branches situated across the country.

“All the big banks have been pushing the central bank to take the NPL off their balance sheet. Finally, the central bank started working on the issue. It is not cancelling the loans but excluding them from the banks’ balance sheets because it is complicating our financial statements,” a bank president told The Reporter.

CBE reported close to two billion birr loans in Tigray were lost. Wegagen bank’s NPL stood at 2.9 billion, while its loss in the Tigray war was 1.2 billion birr. These figures were reported in the first year of the Tigray War, and the figures probably have gone up as the war has reached almost two years now.

ALSO READ:

However, none of the commercial banks’ losses match the Development Bank of Ethiopia’s (DBE) loss in the Tigray war. The policy bank requested the central bank to take 10 billion birr of NPLs off its balance sheet.

“Our NPL in Tigray now is 10 billion birr. We requested the NBE to put it aside from our balance sheet. The central bank delayed to do so. The loans might be paid in the future,” said Yohannes Ayalew (PhD), president of DBE.

Led by Ahmed Shide, Minister of Finance, the Public Enterprises Holding Administration (PEHA) is evaluating the annual performance of DBE.

DBE’s NPL in Tigray jumped from 2.4 billion before the war to 10 billion birr currently. Out of DBE’s total NPL, Tigray alone constituted 12 percent of it. The bank has to allocate 4.1 billion birr provision for the Tigray NPL.

As a result, DBE’s profit for the year shrank from 7.8 billion to 3.7 billion birr. The banks’ net profit for the year is 3.3 billion birr, reducing the 600 million birr in dividends paid to the government. Still, the 3.3 billion birr profit is the biggest among many banks’ performance for the just ended fiscal year.

“If the NBE takes the 10 billion birr NPL off its balance sheet, its NPL ratio drops to 12 percent, profit surges by 4.1 billion birr, and the bank can focus on offsetting its performance in peaceful parts of the country,” Yohannes said.

Yohannes received appreciation from Ahmed and PEHA officials, for rescuing DBE. A year before Yohannes took over in 2020, DBE’s NPL stood at 40.9 percent. At the time, the House of People’s Representatives (HPR) was also discussing closing down the policy bank.

The bank’s NPL dropped below 15 percent, which is the average threshold as per African development banks’ standard.

The war in Tigray affected the policy bank in mobilizing project funds, according to the president. In particular, the European Union withheld EUR 70 million approved for DBE after the war broke out.

Currently, the bank is preparing to float project shares for the youth. It has already certified 28,000 graduates and entrepreneurs, who can buy shares of DBE projects. Once the stock market is launched, which is expected in 18 months, those shares will be traded on the stock exchange, according to Yohannes.

The bank has recovered and rehabilitated 207 projects. Currently, the policy bank is also negotiating with potential investors who are interested in buying Ayka Addis, which has been up for sale for years but repeatedly failed to fetch buyers.

“We are currently negotiating with a new potential buyer. They are local investors. Since last year, we have been negotiating with another potential buyer, but it failed because they lacked adequate financial capacity. We hope this time we can sell Ayka Addis,” Yohannes told The Reporter

SOURCE: The Reporter

0 comment
0 FacebookTwitterPinterestEmail
AfricaBusinessEconomyEgyptNewsNorth AfricaNorthern Africa

Central bank of Egypt cancels maximum deposit limits, increases cash withdrawals to LE 150,000.

by Radarr Africa
written by Radarr Africa

The Central Bank of Egypt (CBE) on Thursday canceled the maximum limits for deposit operations for individuals and companies in bank branches and automated teller machines (ATMs).

The CBE also decided to increase the daily maximum limit for cash withdrawals for individuals and companies from bank branches from LE 50,000 to LE 150,000.

Furthermore, it kept the daily limit for withdrawals from ATMs at LE 20,000.

It clarified in a statement that this step comes in light of the receding of the coronavirus crisis and in order to facilitate the withdrawal process for citizens and companies.

In April 2020, the CBE decided to set maximum limits for cash withdrawals and deposits for individuals and companies, whether through bank branches or automated teller machines, for a temporary period as part of the precautionary measures taken to confront the effects of the Coronavirus crisis.

Source: Egypt Today 

0 comment
0 FacebookTwitterPinterestEmail
AfricaAFRICA NEWSEconomyEgyptNewsNorth AfricaNorthern Africa

Egypt’s central bank holds interest rates steady after a change of governor

by Radarr Africa
written by Radarr Africa

The Monetary Policy Committee (MPC) decided, Thursday to keep the Central  Bank of Egypt’s (CBE) interest rates unchanged for the second time in a row during the first meeting led by the acting Governor of the central bank Hassan Abdalla.

The overnight deposit rate, overnight lending rate, and the rate of the main operation were kept on hold at 11.25 percent, 12.25 percent, and 11.75 percent, respectively.  The discount rate was also kept unchanged at 11.75 percent.

The MPC takes note of its policy rate hikes in its previous meetings, and will continue to assess their impact on inflation expectations and other macroeconomic developments over the medium term, the committee commented on the decision.

It added that achieving low and stable inflation over the medium term is a requisite condition to achieve sustainable economic growth. 

In addition, the MPC reiterated that the path of future policy rates remains a function of inflation expectations, rather than of prevailing inflation rates and as such, will not hesitate to adjust its stance to achieve its price stability mandate. 

The MPC referred to the increase of annual core inflation to reach 15.6 percent in July 2022, driven by higher prices of core food, retail items and services, attributing the hike to the seasonal impact of Eid Al-Adha, the repercussions of the Russo-Ukrainian conflict, as well as, the indirect effects of higher prices of fuel products.

The committee also kept in mind the stabilization of the unemployment rate at 7.2 percent in 2022 Q2, commenting that the stability comes in light of both employment and the labor force figures increasing by similar magnitudes, offsetting one another. 

Moreover, another factor that pushed the MPC towards keeping the rates unchanged, was that the domestic economic activity is estimated to have grown by a preliminary figure of 6.2 percent in fiscal year 2021/22, compared to 3.3 percent in the previous fiscal year. 

“This reflects stronger than previously expected growth,” it stated.

According to the announced data in the MPC’s statement, the latest available data for the first nine months of the fiscal year shows that GDP growth was mainly driven by the private sector, particularly non-petroleum manufacturing, tourism, and trade. Meanwhile, public sector activity was supported by natural gas extractions, Suez Canal and the general government. 

On a global scale, global economic activity has continued to slow down, affected by spillovers from the Russo-Ukrainian conflict, while increased geopolitical risk in South-East Asia is raising uncertainty regarding the global economic outlook, the MPC noted.

It added that despite edging down recently, global financial conditions have remained relatively tight as major central banks have continued to raise policy rates and reduce asset purchase programs with the aim of containing increased inflationary pressures in their respective countries. Meanwhile, global commodity prices have slightly declined after reaching their peak following the Russo-Ukrainian conflict.

ALSO READ: MDCsczone, DP World to build $80M logistics in Egypt

Earlier on Thursday, President Abdel Fatah El-Sisi issued Thursday a republican decree appointing Hassan Abdalla former Vice Chairman & Managing Director of the Arab African International Bank, as acting governor of the Central Bank of Egypt (CBE).

On Wednesday, former Governor of the Central Bank of Egypt (CBE) Tarek Amer resigned and was appointed consultant to President Abdel Fatah al-Sisi.

The president thanked Amer for the efforts he deployed during his tenure, while the latter expressed his appreciation for Sisi’s backing in the past years, saying he wanted to make way for fresh blood by stepping down as CBE governor.

Source: Egypt today

0 comment
0 FacebookTwitterPinterestEmail
AfricaAFRICA NEWSBanking, Finance & InvestmentBusinessEgyptNewsNorth AfricaNorthern Africa

Sisi appoints Hassan Abdullah as acting governor of Egypt’s central bank

by Radarr Africa
written by Radarr Africa

President Abdel Fatah El-Sisi issued Thursday a republican decree appointing Hassan Abdullah former Vice Chairman & Managing Director of the Arab African International Bank, as acting governor of the Central Bank of Egypt (CBE).

On Wednesday, former Governor of the Central Bank of Egypt (CBE) Tarek Amer resigned and was appointed consultant to President Abdel Fatah al-Sisi.

The president thanked Amer for the efforts he deployed during his tenure, while the latter expressed his appreciation for Sisi’s backing in the past years, saying he wanted to make way for fresh blood by stepping down as CBE governor.

The appointment decision comes hours before the meeting of the Monetary Policy Committee of the CBE to take a decision on interest rates, after the Central Bank kept the overnight deposit rate, the overnight lending rate, and the rate of the main operation on hold at 11.25 percent, 12.25 percent, and 11.75 percent, respectively.  The discount rate was also kept unchanged at 11.75 percent.

Recently, Abdullah was the Chairman of the Board of Directors of the United Media Company, succeeding Tamer Morsi.

Hassan Abdullah began his career in the Arab African International Bank in Egypt in 1982, then moved in 1988 to the bank’s branch in New York, where he was appointed in 1994 as Assistant General Manager, then General Manager in 1999, then Vice President and Managing Director in 2000.

ALSO READ: CBE Governor Tarek Amer resigns, appointed consultant to President Sisi

Abdullah held a number of executive positions, as he was appointed as a board member of the Union of Arab and French Banks in Paris, the German-Arab Chamber of Industry and Commerce, the Advisory Board for Emerging Markets, and the Central Bank of Egypt.

He served as a faculty member at the American University in Cairo, and a member of the Strategic Advisory Board at the College of Business Administration at the American University in Cairo.

Source: Egypt today

0 comment
0 FacebookTwitterPinterestEmail
AfricaAFRICA NEWSBanking, Finance & InvestmentBusiness and EconomyEgyptNewsNorth AfricaNorthern Africa

Central Bank of Egypt collects EGP 100B from local banks

by Radarr Africa
written by Radarr Africa

The Central Bank of Egypt (CBE) collected EGP 100 billion from local banks in the weekly open market operations (OMO) auction at a fixed rate of 11.75%, according to data published on Tuesday.

The offered bids amounted to EGP 449.1 billion, CBE’s data showed.

Moreover, the auction’s maturity date is August 23rd

On August 15th, the CBE announced the issuance of treasury bonds (T-bonds) worth EGP 11 billion in an auction.

Source: Arab Finance

0 comment
0 FacebookTwitterPinterestEmail
AfricaAFRICA NEWSBusinessEgyptHospitality, Travel & TourismNewsNorth AfricaNorthern Africa

Egypt’s tourism revenues hike to $8.2B in 9 months

by Radarr Africa
written by Radarr Africa

Egypt’s tourism revenues increased by $5.1 billion during the first nine months of the last fiscal year 2021/2022, on an annual basis, despite the negative effects of the absence of tourists from Russia and Ukraine.

The CBE stated in its report on the performance of the balance of payments that Egypt’s tourism revenues increased to record about $8.2 billion during the period from July 2021 until the end of March 2022, compared to about $3.1 billion during the comparable period of the previous fiscal year.

This came despite the absence of tourists from Russia and Ukraine since the outbreak of the crisis between them and the negative effects on the tourism movement.

In February, the CBE announced that Egypt’s tourism revenues increased during the first quarter of the current fiscal year by 253.3 percent, on an annual basis.

The CBE stated in its report on the performance of the balance of payments, that Egypt achieved $2.83 billion in tourism revenues during the period from July to the end of last September, compared to $801 million during the same period in the previous fiscal year.

ALSO READ: Egypt’s chemical & fertilizer exports hit $4.336B in H1

The tourism movement in Egypt witnessed an improvement during 2021, with the start of the emergence of vaccines for Coronavirus and the recovery of air traffic and countries’ economies from the negative repercussions of the virus during 2020.

Meanwhile, Egypt’s balance of payments (BoP) recorded a total deficit during the first nine months of the last fiscal year 2021/2022 of $7.3 billion, compared to a surplus of $1.79 billion during the same period of the fiscal year 2020/2021.

The CBE deficit during the nine months was recorded almost completely during the period from January to March 2022.

According to the statement, the current account during the period from July to the end of last March amounted to about $13.5 billion.

Source: Egypt Today

0 comment
0 FacebookTwitterPinterestEmail