{"id":324454,"date":"2022-01-16T12:06:50","date_gmt":"2022-01-16T12:06:50","guid":{"rendered":"https:\/\/egy-africa.com\/en\/?p=324454"},"modified":"2022-01-16T12:06:50","modified_gmt":"2022-01-16T12:06:50","slug":"egyptian-banks-vrs-under-pressure-if-foreign-assets-drop-fitch-ratings","status":"publish","type":"post","link":"https:\/\/egy-africa.com\/en\/2022\/01\/16\/egyptian-banks-vrs-under-pressure-if-foreign-assets-drop-fitch-ratings\/","title":{"rendered":"Egyptian banks&#8217; VRs under pressure if foreign assets drop: Fitch Ratings"},"content":{"rendered":"<p>Egyptian banks\u2019 Viability Ratings (VRs) could come under pressure if the banks\u2019 foreign assets continue to drop, Fitch Ratings said in recent report<\/p>\n<p>According to the Central Bank of Egypt (CBE), the banking sector\u2019s net foreign liabilities (NFL) stood at EGP 112 billion ($7 billion) at the end of November 2021, compared with net foreign assets of EGP 107 billion at the end of February 2021.<\/p>\n<p>Fitch attributed the downturn to declining foreign assets.<\/p>\n<p>\u201cIf the trend continues, the banks\u2019 foreign-currency (FC) liquidity and debt service capacity could be constrained,\u201d Fitch explained.<\/p>\n<p>It added that the sector\u2019s NFL were even wider at the end of November 2021 than immediately after the hike in capital outflows that occurred in April 2020 as a response to the Covid-19 pandemic pressure.<\/p>\n<p>\u201cThe deterioration in February-November 2021 was driven by a drawdown of foreign assets despite a strong recovery in foreign portfolio balances, which had increased to $32 billion at the end of October 2021 from a low of $7 billion at the end of April 2020,\u201d Fitch revealed.<br \/>\nMeanwhile, the sector&#8217;s FC lending increased modestly due to foreign assets being used to help meet the CBE\u2019s external debt obligations as the CBE drew down on some of its FC deposits at domestic banks, according to Fitch.<\/p>\n<p>Additionally, Fitch said that Egypt\u2019s account deficit may have added to the pressure on banks\u2019 foreign assets.<\/p>\n<p>According to the CBE, Egypt\u2019s account deficit significantly increased in FY2020\/22 to $18.4 billion, up from $11.2 billion in FY2019\/20.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Egyptian banks\u2019 Viability Ratings (VRs) could come under pressure if the banks\u2019 foreign assets continue to drop, Fitch Ratings said in recent report<\/p>\n","protected":false},"author":4,"featured_media":320008,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[22,33],"tags":[161],"class_list":["post-324454","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","category-main","tag-fitch-ratings"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - 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