CBE is ready to repay Egypt’s foreign obligations: Amer

Central Bank of Egypt (CBE) is ready to repay any foreign obligations on Egypt at any time without delay, the bank’s governor Tark Amer said Tuesday.

Amer told Daily news Egypt that Egypt can afford repaying its debts and interests worth $13 billion during the financial year 2017/2018.

The debts due to be repaid during the next year include deposits obtained by Egypt from Saudi Arabia worth $2 billion in 2013, $2 billion from the United Arab Emirates (UAE), and $2 billionfrom Kuwait, in addition to $2 billion obtained from Libya in 2013, respectively.

CBE is set to repay $5.22 billion during this year, $6 billion in 2019, and $6.1 billion in 2020 as well as $3 billion in 2021.

Amer said that the CBE is keen to repay foreign obligations on time, and that it depends on large flows and strong reserves of foreign exchange.

The Egyptian official further clarified that there are ongoing negotiations with international financing institutions on financing projects inside Egypt.

Amer has not specified a deadline for receiving the second tranche of the International Monetary Fund’s (IMF) loan, worth $1.25 billion.

Egypt received the first tranche of $2.75 billion on 12 November 2016.

In response to a question about the deadline for the sale of the United Bank and offering the shares of Banque du Caire and the Arab African International Bank (AAIB) in the stock exchange.

Amer said that this is part of the government’s plan for the offerings- and, therefore, the timing is in the hands of the government.

Amer took part in the third economic conference of El Amwal newspaper in his first appearance after returning from medical treatment in Germany.

Amer responded to rumours about his ability to continue his tenure, saying that he is fine. “My leg is good, and my brain is working.”

Rumours circulated when Amer was abroad that he will not be able to continue as the CBE’s Governor to end his four-year tenure that began in November 2015.

Several names of possible successors were circulated, including Hisham Ezz Al-Arab, chairperson of the Commercial International Bank.

He also refuted rumours about submitting his resignation.

“Why would I resign?” he asked, stressing that the CBE prioritises operations next to curbing inflation.

He said that Egypt entered free trade agreements without being prepared for them, which increased imports from $18 billion in 2003 to $76 billion in 2016, including $12 billion worth of goods from China alone every year.

He pointed out that 88 percent of growth recorded over the past few years was consumption, not real economic activity, adding that facing the problems was necessary and it must be supported by the people, the political leadership, and the world.

He noted that CBE secured $30 billion in the past five years, including $13 billion from the local market and the remainder from foreign institutions.

He explained that there is nothing standing in the way of foreign investments now.

“I took office when there were goods stuck at ports worth $5bn, now there is not a single dollar worth of goods stuck,” Amer stressed.

According to Amer, the volume of Arab deposits received by the CBE fell to $2 billion in 2016, down from $31 billion between 2011 and 2015.

He pointed out that the size of loans granted to small and medium-sized enterprises (SMEs) amount to 101 billion Egyptian pounds.

He stressed that banks spare no efforts to support SMEs, adding that the CBE prepared several public and private banks as well as institutions to support the sector.

Amer emphasised the CBE’s satisfaction with the foreign exchange reserves at the end of February 2017, recording $26.5 billion, noting that there is no need to increase it further now, even though it is expected to rise in the coming period.

Deputy CBE governor Gamal Negm said, during the conference, that banks covered imports of $24 billion since flotation until now, including $8 billion of letters of credit.

He added that financial stability requires diversity in economic activities and credit portfolio, highlighting the role of small businesses in achieving financial inclusion.

Source: Daily news