The Central Bank of Egypt has issued a circular that puts in place a mechanism under which it could in the future provide emergency liquidity to banks that request it.
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The mechanism is primarily designed to provide liquidity to solvent banks if they are unable to obtain it from the interbank or financial markets. The mechanism is purely a precautionary move mandated by the Central Bank and Banking Act of 2020, bank deputy governor Gamal Negm told Al Arabiya late yesterday. Having the mechanism in place is both good governance and in line with international norms.
Negm stressed that local lenders have some of the strongest liquidity positions in emerging markets. His interview is getting domestic attention from Ahram Gate.
