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Reform measures taken in 2016 to positively reflect on performance of economy, banks in 2017: El-Damaty  - Daily News Egypt

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Reform measures taken in 2016 to positively reflect on performance of economy, banks in 2017: El-Damaty 

Payment of temporary facilities obtained by customers in foreign currency is the most prominent challenge facing the banking sector


Banking expert and member of the Emirati-Egyptian Business Council Sahar El-Damaty expressed her optimism regarding the new year, stressing that the recent reform measures implemented by the government and the Central Bank of Egypt (CBE) in 2016 will positively reflect on the Egyptian economy, and with it, on the performance of banks operating in Egypt during 2017.

She explained that the actions and decisions, including floating the national currency, boosting exports, rationalising imports, and the trend of expansion in the cultivation of commodities that are imported, will collectively ease the pressure on the US dollar and support the foreign exchange reserve rates, as well as increase the banks’ dollar resources. This would also positively reflect on the performance of the banking sector and increase its ability to meet the demands of clients, she added.

She noted that easing the demand on hard cash, whilst increasing the state’s resources of it, will drive its price down until it reaches a fair value.

Furthermore, she said that the next period will see a decline in inflation, which had significantly increased at the end of 2016 on the back of reforms. “This means that interest rates at banks will fall, which will then stimulate demand on loans by investors,” she explained.

She pointed out that the price of the US dollar against the Egyptian pound is likely to decline throughout the year—the thing that will lower production costs. Therefore, companies will expand and seek more loans.

According to El-Damaty, initiating major national projects, such as the New Administrative Capital, will boost demand on borrowing from banks by companies engaged in these projects. “This would eventually give a boost to banks’ activities and push their revenues upwards,” she added.

In addition, El-Damaty said that the main challenge facing banks in 2017 will be how to find a solution to the temporary facilities obtained by customers in foreign currency that have not been paid yet, noting that this would require huge effort by the CBE and banks.

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https://eklutdvotyzsri.dailynewssegypt.com/2017/01/21/reform-measures-taken-2016-positively-reflect-performance-economy-banks-2017-el-damaty/
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