Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Egyptian Banks Federation Denies Liquidity Issues


Tue 25 Jan 2022 | 07:33 PM
Taarek Refaat

The Federation of Egyptian Banks (FEB) strongly denied the rumors that the Egyptian banking sector suffers from liquidity problems, which puts depositors’ money at risk, stressing the integrity of the system, system,and  its durability and its ability to protect the deposits of its clients.

FEB indicated that the financial soundness indicators of the Egyptian banks reflected the rise in the ratio of the capital base to the risk-weighted assets to about 19.3% in September 2021, and the net foreign exchange reserves jumped from $16.7 billion in June 2014 to $41 billion in November 2021.

The federation stated that the non-performing loans to total loans index showed an improvement in performance, as the index decreased from 8.5% in June 2014 to 3.6% in September 2021.

It said that despite the international challenges and the negative repercussions that the pandemic had on the global economy as a whole, the banking sector still enjoys the strength and durability of its financial positions and high liquidity rates, which calls for the intervention of the Central Bank of Egypt  (CBE) through monetary policy tools and the open market to withdraw excess liquidity from the banking sector on a weekly basis, which indicates the high levels of liquidity in the sector.

It pointed to the strong legislative environment that consolidates the superiority of the Egyptian banking sector, enhances its independence, and protects the funds of its clients, as it ensures the early intervention of the central bank to prevent banking crises, address the situation of troubled banks, regulate oversight and supervision of payment systems, services and financial technology, in addition to establishing legal frameworks to regulate issuance and circulation of digital payments.

The new law included setting rules for fair competition, preventing monopoly and protecting the rights of customers in the banking system, based on the best international practices of central banks.

Regarding the new digital banking services and the enhancement of electronic security, the federation said that it has achieved more successes, noting that there are many successes that will be achieved at the level of the banking sector in the future, which will add more strength and competitiveness to the Egyptian banking sector.