Egypt Central bank chief appoints caretaker governor for the rest of his term

Central Bank of Egypt (CBE) Governor Hisham Ramez appointed deputy governor Gamal Negm to serve as caretaker governor until the end of his tenure, an official CBE spokesperson told Ahram Online Wednesday.

“Governor Hisham Ramez has handed over his responsibilities to Gamal Negm and is on leave as of today, until the end of his term on 26 November,” the spokesperson told Ahram Online in a phone interview Wednesday.

The news comes as the CBE strengthened the Egyptian Pound against the U.S. Dollar by LE0.20 to an official rate of LE7.73 on Wednesday, causing confusion in the market, which had been anticipating a depreciation of the local currency.

“I am not sure why this is taking place now. It is very confusing for us and the market,” one Cairo-based economist told Reuters on Wednesday. “This is something I didn’t expect would happen in 2016 let alone 2015. Where is this money coming from?”

Egypt’s foreign currency reserves currently stand at $16.4 billion, enough to cover three months worth of the country’s imports of food and fuel.

The Central Bank, which has been controlling the exchange rate through regular foreign currency auctions, has allowed the pound to fall by close to 11 percent in a series of controlled devaluations since January, before Wednesday’s surprise move.

Economists have been predicting a depreciation of the pound, especially since Egypt’s three largest public sector banks and a fourth private lender launched savings certificates at an interest rate of 12.5 percent, higher than the normal 10 percent, in the past week, in what was seen as a move to support the pound in the face of mounting pressure.

Egypt’s tourism sector, a main source of foreign currency, is expected to suffer $280 million (LE2.2 billion) per month in revenue losses due to the UK and Russia’s decision to suspend flights to the country after the crash of Russian Metrojet flight 9286 in the Sinai Peninsula, Minister of Tourism Hesham Zaazou said on Wednesday.

State-run agency MENA reported that the dollar traded LE1 lower in the black market following Wednesday’s decision, changing hands for LE7.70 amid heavy selling.

Exchange bureaus are allowed to trade at up to LE0.15 above the official rate.

Former National Bank of Egypt Chaiman and Deputy CBE Governor Tarek Amer is set to take over as Central Bank Governor after the end of Ramez’s term later this month.

source: Ahram online