Egypt replaces central bank head amid currency crisis
Egypt replaces central bank head amid currency crisis
The head of the Egyptian central bank has resigned and will be replaced by a former chairman of the country’s largest commercial bank, amid debate on steeper currency devaluation.
2 min read
Egypt's foreign exchange reserves have tumbled in September [Getty]
Egypt's central bank governor Hisham Ramez will not renew his term when it expires in November and will be replaced by senior banker Tarek Amer, the government announced in a statement on Wednesday.
The statement said the veteran banker will be replaced by former National Bank of Egypt chairman Tarek Amer effective 26 November.
Ramez has faced increasing criticism in recent months as the Egyptian pound has come under pressure.
"Recently there have been serious differences between several ministers and Ramez over his devaluation of the Egyptian pound without their consultation," a ministry of investment official told al-Araby al-Jadeed's Arabic service.
"The devaluations to the Egyptian pound have been carried out in accordance with a previous deal with the IMF to devalue it by between 20 to 30 percent," the official added.
He said that recently there has been much pressure on cash reserves because of the decline in non-oil exports and tourism revenue, leading to loss of over $3.6 billion in three months.
On Sunday, Egypt's central bank weakened the value of the Egyptian pound against the dollar for the second time in a week.
The bank said in a statement that it weakened the pound at an auction, dropping the value from 7.83 to 7.93 pounds per dollar.
The central bank has allowed commercial banks a wider margin for selling and buying dollars since January, at 0.10 pounds above or below the official rate.
The central bank effectively controls the value of the domestic currency in regular foreign currency auctions. This is the weakest the pound has been since the Egyptian government introduced the auction system in December 2012 aimed at regulating devaluation.
The new rate could boost much-needed foreign investment, as investors and economists see the currency as overvalued.
Amer's appointment has been widely welcomed by the business community at large, which is hoping that he will scrap caps on USD deposits and proceed with a more aggressive float of the pound.
According to local media, Amer has deep connections with the current regime and his good friends with Gamal Mubarak - the son of ousted president Hosni Mubarak.
His uncle was the former minister of defence Abd al-Hakim Amer who allegedly committed suicide in 1967, after being arrested for plotting a coup to overthrow the president at the time Gamal Abd al-Nasser.
The statement said the veteran banker will be replaced by former National Bank of Egypt chairman Tarek Amer effective 26 November.
Ramez has faced increasing criticism in recent months as the Egyptian pound has come under pressure.
"Recently there have been serious differences between several ministers and Ramez over his devaluation of the Egyptian pound without their consultation," a ministry of investment official told al-Araby al-Jadeed's Arabic service.
"The devaluations to the Egyptian pound have been carried out in accordance with a previous deal with the IMF to devalue it by between 20 to 30 percent," the official added.
He said that recently there has been much pressure on cash reserves because of the decline in non-oil exports and tourism revenue, leading to loss of over $3.6 billion in three months.
On Sunday, Egypt's central bank weakened the value of the Egyptian pound against the dollar for the second time in a week.
The bank said in a statement that it weakened the pound at an auction, dropping the value from 7.83 to 7.93 pounds per dollar.
The central bank has allowed commercial banks a wider margin for selling and buying dollars since January, at 0.10 pounds above or below the official rate.
The central bank effectively controls the value of the domestic currency in regular foreign currency auctions. This is the weakest the pound has been since the Egyptian government introduced the auction system in December 2012 aimed at regulating devaluation.
The new rate could boost much-needed foreign investment, as investors and economists see the currency as overvalued.
Amer's appointment has been widely welcomed by the business community at large, which is hoping that he will scrap caps on USD deposits and proceed with a more aggressive float of the pound.
According to local media, Amer has deep connections with the current regime and his good friends with Gamal Mubarak - the son of ousted president Hosni Mubarak.
His uncle was the former minister of defence Abd al-Hakim Amer who allegedly committed suicide in 1967, after being arrested for plotting a coup to overthrow the president at the time Gamal Abd al-Nasser.
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