CBE leaves interest rates on hold: The central bank’s Monetary Policy Committee left the country’s key interest rates unchanged during its Thursday meeting. Rates remain at 18.75% for overnight deposits and 19.75% for overnight lending. The discount rate also remained unchanged at 19.25%, the CBE said in a statement. The MPC acknowledged improvements in economic conditions in recent months — driven mainly by tourism, trade, natural gas, construction, and non-petroleum manufacturing — but said “the inflation outlook remains in line with achieving the inflation target. Against this background and given the continuation of tightening real monetary conditions, the MPC decided that current policy rates remain appropriate at this juncture.” Economists polled by Reuters last week had predicted that rates would remain on hold, explaining that inflation has not yet reached levels that would warrant a decrease in borrowing and lending costs, especially as the government is working toward reaching a 13% inflation rate by 4Q2018. The MPC has raised interest rates by a total 700 bps since the EGP was floated last year in a bid to help curb soaring inflation levels, which only began to cool in August, when core inflation slowed to 34.86%, from 35.62% in July, and annual headline inflation declined to 31.9%, from 33.0% the month before.

…Separately, foreign debt rose 42% y-o-y to USD 79 bn in FY2016-17 from USD 55.8 bn in FY2015-16, the central bank announced in its 2016 Financial Stability Report. The increase comes mainly from low-cost, long-term facilities, according to the report, which says that the figure “remains within safe levels by international standards, as it’s still below global net foreign reserves” at 39% of the total. Institutional loans from foreign and regional lenders are up by USD 7.7 bn, those from treasuries and bonds are up by USD 5.5 bn, while short-term loans are up by USD 5.3 bn. The Finance Ministry is planning to issue USD 7 bn in eurobonds in FY2017-18.

The central bank will announce FX reserve figures for September “within days,” according to Youm7. Net international reserves had reached their highest point ever in July, jumping to USD 36 bn.

Finance Minister Amr El Garhy wants economic reforms to achieve stability, he told Euromoney in an interview. He wants to see Egyptian exports grow, saying that while they are annually in the USD 20 bn region, other peers like Malaysia and Indonesia export ten times the volume. El Garhy also noted that subsidy reform was a necessity: “Subsidies have been one of the things that’s really hurt this economy and hurt the people. They’ve been a massive cost to the country, but the regime back then did not want to increase costs for the people to ensure there was no resentment or backlash… When you give an absolute subsidy to everyone, without any distinction, you hurt the poor more than the rich, who had two or three cars and can afford it.” Euromoney also pointed out concerns about policy stability, noting that El Garhy is Egypt’s ninth Finance Minister since 2011, and if he lasts until April, he will have been in office for 25 months and will become longest-serving minister since then. El Garhy: “I’m happy to do the job, if they keep me. It’s not my decision. But definitely, I love to serve my country. I will not tell you that it is patriotic when you feel you have the necessary experience to do the job… It’s challenging, a lot of pressure … I’m doing this job at a difficult time, when there’s a need for economic reform.”

Stop us if you’ve heard this one before: An electronic visa system for inbound tourists is set to launch “within weeks,” Tourism Minister Yehia Rashed said, according to a report in Al Shorouk. Ministries and government bodies operating the system, including the civil aviation, foreign affairs, and defense ministries, are currently running trials ahead of launch. The Supreme Tourism Council had agreed back in February to introduce electronic visas and “facilitate visas for Arab citizens” to stimulate the tourism industry. The system had been expected to launch by May.

Prepaid mobile phone credit prices rise 36%: The National Telecommunications Regulatory Authority (NTRA) approved an effective price hike on prepaid mobile phone scratch cards, leaving face values unchanged, but lowering the value of airtime charged on each, Al Mal reports. An NTRA source tells the newspaper that consumers will not be paying more per card, but the value of the purchased credit has been cut by 36%. The new prices were scheduled to come into effect as of Thursday evening, and are being applied to old scratch cards that have yet to be sold, NTRA Vice President El Sayed Azzouz tells Al Shorouk.

The decision has ruffled feathers, with the House of Representatives summoning ICT Minister Yasser El Kady to discuss the reasons behind the increased cost of the service. House Telecoms Committee Under Secretary Ahmed Zedan tells Al Shorouk the move was not approved by parliament and could therefore be overturned or amended. MP Abdel Hameed Kamal said the hikes coincide with the launch of Telecom Egypt’s WE, which should have increased competitiveness among MNOs and brought down service costs, Al Mal reports. The decision to allow MNOs to hike prices came as they sought a 5% profit margin on scratch cards against the current 2%, the newspaper says.

MNOs say they had requested permission to hike prices across the board following the float of the EGP and lifting of fuel and electricity subsidies, according to Al Borsa. The NTRA’s Azzouz says MNOs had requested an increase of 50%, which the NTRA reduced to 36% to reflect the additional costs incurred by the value-added tax. The authority has reportedly also granted Telecom Egypt’s Ehna / We mobile network permission to offer a 30% discount on phone scratch cards. Other MNOs will not be allowed to make the same offer.

Egypt could see USD 1 bn in funding from the IFC this fiscal year: Egypt will be the key beneficiary of a 20% increase in funding the International Finance Corporation (IFC) is planning to provide to the MENA region this year, said the IFC’s MENA director Mouayed Makhlouf. The IFC is planning to raise MENA funding to USD 2 bn in its current financial year which ends in June 2018, up from USD 1.7 bn last year. IFC funding to Egypt is expected to triple to USD 1 bn this year from around USD 300 mn in the previous 12-month period, The National reports. “What helped is the reform of the Egyptian government and the very strong IMF programme that was adopted and agreed to with the IMF,” Makhlouf said. “The very strong reforms [in Egypt] we haven’t seen in any other government in the region and we hope others follow, especially in North Africa,” he added.

This comes as the Green Climate Fund’s board has agreed invest some USD 350 mn in Egyptian projects, Environment Minister Khaled Fahmy said on Saturday, Al Mal reports. Those include USD 154.7 mn for renewable energy projects and a USD 31.4 mn grant to support a climate change adaptation program in the North Coast, which entails building protective barriers along 69 km of lowlands on the sea and the Nile Delta. The GCF has also agreed to fund a program to promote private sector participation in climate-centric projects through special loans offered by local lenders. The GCF made the decision during their board meeting in Cairo yesterday, where they aimed to discuss the development of the fund’s project portfolio and consider new proposals, according to a statement.

MOVES- Limited changes to management, boards of state-owned banks: The Ismail cabinet approved on Thursday changes to the boards and management of a number of state-owned banks, according to a statement picked up by Al Borsa.

CBE Deputy Governor Tarek Fayed was appointed chairman of Banque du Caire, replacing Mounir El Zahed, with Mahmoud Mashhour and Amr El Shafei being tapped to serve as Fayed’s deputies.

At Banque Misr, Chairman Mohamed El Etreby will remain in place alongside Vice Chairman Akef El Maghraby for another three-year term, while Sahar El Damaty will replace Ahmed Abu El Ezz as vice chairman.
Hisham Okasha will stay on as the chairman of National Bank of Egypt, with Yehia Aboul Fotouh in place as the first deputy chairman. Dalia El Baz was appointed as the second deputy chairman of the Bank.

Maged Fahmy will continue to run the Industrial Development and Workers Bank of Egypt, while Hany Seif El Nasr will stay on as chair of the Arab Investment Bank.

Ten companies have presented financial and technical offers for the Education Ministry’s PPP schools project, unnamed government sources tell Al Borsa. These include Cairo Development and Investment, Middle East Education Services Group, a consortium of Egypt’s Gezira Academy and Saudi Arabia’s Madinat Al Oloum, Baraem Modern School, and Kuwait’s Excellence for Creativity Company. Orascom Construction’s Concessions Director, Khaled El Degwy, said his company pulled out because the project would require it to partake in the educational element of the project, which is not the company’s area of expertise. Carillion also withdrew from the project because of “increased risk,” as we noted last week. BPE Partners had announced in August that it had decided to back out because the project would not be in line with the company’s strategy. The final list of contending companies will be announced by mid-October, and the contracts for the project will be signed in December.

There are >104 mn of us, according to the census: Egypt’s population is growing at a rate of approximately 2 mn people per year, The Central Agency for Public Mobilization and Statistics (CAPMAS) revealed yesterday when it announced the results of its 2017 national census (paywall). According to the census, Egypt’s overall population has reached 104.2 mn, 94.8 mn of whom currently reside in Egypt, CAPMAS head Abu Bakr El Gendy said, according to an Ittihadiya statement. The report also indicates that there are approximately 18.4 mn Egyptians who are illiterate, 10.6 mn of whom are women, Al Borsa reports.

Gov’t zeroes in on underage marriages: President Abdel Fattah El Sisi expressed his concern about some of the statistics in the report, including the prevalence of underage marriage among Egyptian girls. The report had revealed that around 40% of married women were under the age of 18. As we noted in Last Night’s Talk Shows above, the state is planning to criminalize the act. El Sisi called for the establishment of a committee to study and analyze the census’ data. El Gendy had said earlier this month that the bureau may use the results of the census to create its own investment map.

EFG Hermes topped the EGX’s 2017 league table with an 18.7% share of value traded, followed by CI Capital at 8.8%. Pioneers (5.5%), Pharos (5.4%) and Beltone (5.0%) rounded-out the top five. For 9M17, the rankings are EFG Hermes (23.8%), CI Capital (8.9%), Al Rowad (5.5%), Pharos (4.4%) and Beltone (4.2%).

The UK listing authority has approved CIB’s request to issue additional global depository receipts, Reuters reports. The approval allows CIB to admit up to one bn GDRs.

Kuwait gets FTSE Russell nod, but Saudi will have to wait until at least next year: Saudi’s Tadawul is “close to an upgrade” to secondary emerging market status and will be reassessed in March 2018, the index provider said in a statement this weekend. Kuwait, meanwhile, has been bumped to secondary EM status, according to Bloomberg.