Egypt banking sector can withstand fresh pandemic wave

 

Egypt banking sector can withstand fresh pandemic wave

CBE takes measures to boost financial stability

Egypt’s financial system has sustained its stability over the past few years on the back of successful economic reforms since November 2016. Such reforms have immunized the national economy against global setbacks and the negative impacts of the Covid-19 pandemic.

The Central Bank of Egypt (CBE) has reiterated the strong potential of the local financial system to withstand a second wave of the Covid-19 pandemic. The CBE has asserted the banking system’s sound position in case of any further repercussions of the pandemic.

In its “Financial Stability Report”, the CBE has said that the results of the stress tests proved the strength of the banking sector’s capital base, as represented by the country’s 15 largest lenders (accounting for 84.2 per cent of the total banking sector’s assets) in case of macroeconomic and financial risks from a probable fresh wave of the pandemic.

The banking sector’s net foreign currency assets cushioned $8.5 billion portfolio outflows on the January-March period, the CBE report said.    

The CBE has taken around 30 measures worth LE700 billion ($44.6 billion) to help the nation’s economy withstand the repercussions of the Covid-19 pandemic in 2020.

The measures aimed at supporting all economic sectors, i.e. manufacturing, agriculture, tourism, real estate, contracting, healthcare, small and medium –sized enterprises (SMEs) and microbusinesses. The measures also targeted individuals and entrepreneurs impacted by the pandemic’s repercussions.

The CBE has instructed all lenders to facilitate repayment for borrowers, who have been impacted by the lockdown and other precautionary measures taken to contain the Covid-19 pandemic.

Digital transformation

The CBE boosted digital transformation and financial technology as part of efforts to increase reliance on cashless solutions and bolster financial inclusion. To this end, the CBE launched 300,000 electronic points of sale (POS) across the country.

The CBE has extended free-of-charge cash withdrawals from ATMs until the end of June 2021. The move is part of measures to combat the spread of the Covid-19 pandemic.

Bank transfers, issuance of bank portfolios and mobile transfers will also be exempted. The move also applies to the issuance of e-wallets, VCNs and prepaid cards.

Platinum certificates’ yields 1% down

The National Bank of Egypt (NBE) and Banque Misr cut yields on three-year saving certificates (monthly yields) by one per cent to 11 per cent. The two state-owned banks also stopped issuances of the three-year platinum certificates (quarterly yields).

The move comes in line with the CBE’s easing monetary policy applied in 2020. The CBE’s Monetary Policy Committee left overnight interest rates unchanged on December 24.