Egypt markets ‘working normally’

There were large queues on Sunday when banks reopened after a week

The Egyptian currency and stock markets are functioning in “a normal fashion,” the deputy governor of the Central Bank of Egypt has said.

Hisham Ramez told BBC World the bank had had to intervene earlier in the week after “some speculative moves”.

But he said since then there had been some “good news”, with foreign investors returning to take part in the first bond auction since the unrest.

Mr Ramez also said he was not concerned about the value of the Egyptian pound.

Some analysts have expressed concerns that the pound could fall sharply in value – by up to 25% in a month.

But Mr Ramez said: “We are not actually worried about the market as it is functioning in a normal way now.

“The supply and demand is there.”

Egypt’s banks were closed for a week before re-opening on Sunday.

There had been concerns about the possibility of a bank run, with investors taking flight and depositors withdrawing their money.

Large queues were reported outside banks, and the deputy central bank governor said it had been an exceptionally busy day. But he said they had been well-prepared.

“On Sunday there was lots of buying, this was expected and we were ready for it.”

“The average volume on the Egyptian interbank market is around $350m a day. At that day the volume was around $1.7bn,” Mr Ramez said.

He pointed out that the central bank’s main role was to ensure that there was sufficient liquidity in the markets and said they had done that.

Economic hardship

As the political unrest continues, the cost to the economy is causing concern.

Analysts at the French bank Credit Agricole recently estimated the cost to be $310m (£192m) a day.

Nationwide strikes are threatening to cause more economic hardship and the Norwegian oil company Statoil has said that it is no longer drilling in Egypt.

Meanwhile, the company running the Suez Canal – another vital source of foreign currency – has said that January’s takings were 1.6% lower than in December.

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