Egypt Watch

CBE withdraws EGP 100 billion cash from banks

n Tuesday, the Central Bank of Egypt announced the issuance of one-week treasury bills at 100 billion pounds, in a renewal of a similar offering last week, at the same value.

This is the highest withdrawal of cash through offerings since November 2016. Such offerings, according to experts, work as short-term loans at an interest rate equal to the one set by the bank.

Sherif Othman, former vice president of the Arab Banking Corporation, said that withdrawing cash from banks through short-term deposits is a financial liquidity tightening mechanism. “It decreases cash available at banks likely to operate in lending, raising inflation rates,” Othman added that low financial liquidity means tightening borrowing conditions for those wishing to borrow.

President Abdel Fattah el-Sisi had issued a decree designating Hassan Abdullah, the head of United Media Services, a company affiliated with the General Intelligence Directorate, as the acting governor of the Central Bank. Abdullah is a former member of the dissolved National Party. He also held the position of Chairman of the Board of Directors of the Arab African International Bank before he was dismissed by the former Central Bank Governor, Tarek Amer, in 2018, on accusations of corruption.

Egyptian television had announced that el-Sisi accepted the resignation of Amer. Amer said he asked to step away from his position to allow others to “complete the successful development process” under the president’s leadership. Amer had been the governor of the Central Bank since November 2015.