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The Central Bank of Egypt (CBE) has decided on 7/11/2008 to keep its overnight deposit and discount rate unchanged at 11.5 per cent per annum. At its meeting held on Thursday night 6/11/2008, the Monetary Policy Committee (MPC) decided to keep the overnight deposit and lending rates unchanged at 11.5 per cent and 13.5 percent, respectively. Over the past six weeks, turmoil in the global financial markets has severely intensified, leading many central banks in developed and emerging countries to intervene in their respective domestic markets using all tools available to ease liquidity hardship and ensure that their money markets are orderly functioning, said a CBE press release. "The impact on the Egyptian banking sector, however, has been minimal in light of prudent regulations and domestic liquidity conditions. In the meantime, domestic inflationary pressures are expected to ease supported by the significantly lower international commodity prices and the expected moderation in the domestic economic growth in light of the global slowdown." The Egyptian banking system continues to be relatively isolated from the global turbulence as domestic banks have very limited exposure to the failed and stressed global financial institutions, the CBE said. Moreover, the exposure of domestic banks to risky assets has been marginal since there are virtually no investments in structured credit products or other impaired derivative products, it said. Prudent regulatory surveillance and effective banking supervision, which have been strengthened under the Central Bank of Egypt's Banking Sector Reform Program launched in 2004, have ensured that the Egyptian banking system continues to function normally amid the global financial turmoil, it added. |
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