{"id":568438,"date":"2020-12-30T03:27:38","date_gmt":"2020-12-30T03:27:38","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/"},"modified":"2020-12-30T03:27:38","modified_gmt":"2020-12-30T03:27:38","slug":"how-the-cbe-plans-for-future-risks","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/","title":{"rendered":"How the CBE plans for future risks"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-02\"><\/a> <strong>Want to know what\u2019s keeping the CBE up at night? <\/strong>Have a look through the central bank\u2019s latest Financial Stability Report, which takes a deep dive into a range of risk scenarios for Egypt and how they might be managed should they come to pass.<\/p>\n<p><strong>One of the more interesting (if presently unlikely):<\/strong> What could prompt the CBE to reverse course on easing and start raising rates? Covid, of course.<\/p>\n<p><strong>Here\u2019s how it might work:<\/strong> The report points to a potential series of events, starting with the second wave slowing down GDP growth as tourism grinds to a halt and other industries also take a hit. The budget deficit could also widen if the government needs to ramp up public spending on healthcare services and roll out fresh stimulus (which Finance Minister Mohamed Maait said <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/b0cf47be-9482-49f9-bc1a-4e4a1019da07\">earlier this month<\/a> the government is ready to do). A widening deficit and shrinking economy could come together with another drop in FX streams \u2014 namely lower remittances from Egyptians abroad, a dip in Suez Canal revenues, and potential portfolio outflows \u2014 to throw off the balance of payments and bring the currency under pressure. This scenario would, in turn, create inflationary pressure that could require the central bank to reverse its monetary easing cycle and raise rates again.<\/p>\n<p><strong>The report makes clear the bank is still on its easing path<\/strong>, pointing out that easing can likely continue as it did during the first wave, particularly that the likelihood of a significant spike in inflation is low.<\/p>\n<p><strong><a href=\"https:\/\/ent.news\/2020\/12\/Financial-Stability-Report-2019.pdf\">There\u2019s lots more in the report (pdf)<\/a><\/strong>, which dives into multiple risks, systemic security and policy options for how the CBE could act in a variety of situations.<\/p>\n<p><strong>The CBE has cut interest rates by <\/strong><strong><a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/5662d281-1e6f-4604-b559-ae1ac16ce3be\">400 bps this year<\/a><\/strong>, including a record <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/f2e78eb3-6978-4eb5-a04f-a3b7247293ed\">300 bps cut<\/a> in March and 50 bps cuts at <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/5662d281-1e6f-4604-b559-ae1ac16ce3be\">two consecutive meetings<\/a>. The bank\u2019s monetary policy committee decided to leave rates on hold at its final meeting of 2020 <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/8a7e084b-539b-48a1-9a82-a716977f281f\">last week<\/a>, citing global concern about the new covid-19 variant, but expectations are that CBE is still on an easing path \u2014 barring a shock such as the one above.<\/p>\n<p><strong>SEPARATELY- The CBE is launching a multicurrency real-time gross settlement (RTGS) system next year<\/strong>, the report says, without specifying when in 2021 we can expect the system. The CBE has had an <a href=\"https:\/\/www.cbe.org.eg\/en\/PaymentSystems\/Pages\/SnapshotRTGS.aspx\">RTGS system<\/a> \u2014 which is used to process large-value and \u201cthe most important types of funds\u201d \u2014 in place since 2009, but the system will be upgraded to include multiple foreign currencies.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Want to know what\u2019s keeping the CBE up at night? Have a look through the central bank\u2019s latest Financial Stability Report, which takes a deep dive into a range of risk scenarios for Egypt and how they might be managed should they come to pass. One of the more interesting (if presently unlikely): What could [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":568439,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10218],"tags":[271,107,72,182,349,4319],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-568438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policy-watch","tag-central-bank-of-egypt","tag-covid-19","tag-enterpriseam","tag-inflation","tag-interest-rates","tag-policy-watch","wpautop","entry"],"acf":{"mongo_id":"75a5446a-9fbc-43ae-8dd9-466b35d34f95","is_powered_by":true,"story_type":"1","photo_url":"https:\/\/ent.news\/2020\/12\/495.jpg","photo_position":"above","related_issue":[568432],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How the CBE plans for future risks - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How the CBE plans for future risks\" \/>\n<meta property=\"og:description\" content=\"Want to know what\u2019s keeping the CBE up at night? 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One of the more interesting (if presently unlikely): What could [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2020-12-30T03:27:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/ent.news\/2020\/12\/495.jpg?fit=%2C&ssl=1\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"How the CBE plans for future risks\",\"datePublished\":\"2020-12-30T03:27:38+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/\"},\"wordCount\":419,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"image\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/i0.wp.com\/ent.news\/2020\/12\/495.jpg?fit=%2C&ssl=1\",\"keywords\":[\"Central Bank of Egypt\",\"covid-19\",\"EnterpriseAM\",\"inflation\",\"interest rates\",\"POLICY WATCH\"],\"articleSection\":[\"POLICY WATCH\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/\",\"url\":\"https:\/\/enterpriseam.com\/egypt\/2020\/12\/30\/how-the-cbe-plans-for-future-risks\/\",\"name\":\"How the CBE plans for future risks - 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A rise in interest rates in the CBE\u2019s upcoming monetary policy committee meeting later this month is \u201ca very big possibility,\u201d he said\u2026","rel":"","context":"In &quot;LAST NIGHT\u2019S TALK SHOWS&quot;","block_context":{"text":"LAST NIGHT\u2019S TALK SHOWS","link":"https:\/\/enterpriseam.com\/egypt\/category\/last-nights-talk-shows\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":556550,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/10\/31\/egypt-leaves-rates-on-hold-as-cbe-eyes-fed-taper-inflation\/","url_meta":{"origin":568438,"position":1},"title":"Egypt leaves rates on hold as CBE eyes Fed taper, inflation,","author":"enterpriseam admin","date":"31 October 2021","format":false,"excerpt":"The Central Bank of Egypt (CBE) left interest rates on hold for an eighth consecutive meeting on Thursday amid rising global inflation and expectations the US Federal Reserve will start tapering its stimulus program by the end of the year. The Monetary Policy Committee left overnight deposit and lending rates\u2026","rel":"","context":"In &quot;Economy&quot;","block_context":{"text":"Economy","link":"https:\/\/enterpriseam.com\/egypt\/category\/economy\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/10\/320.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":570452,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/04\/01\/enterprise-poll-cbe-to-leave-rates-on-hold-in-april-meeting\/","url_meta":{"origin":568438,"position":2},"title":"Enterprise Poll: CBE to leave rates on hold in April meeting","author":"enterpriseam admin","date":"1 April 2020","format":false,"excerpt":"ENTERPRISE POLL- CBE to leave rates on hold tomorrow: The Central Bank of Egypt is likely to leave interest rates on hold when its Monetary Policy Committee meets tomorrow, according to a poll of analysts conducted by Enterprise. Ten of 11 analysts polled expect the bank to leave interest rates\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/4\/4.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":573712,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/08\/16\/in-line-with-consensus-central-bank-of-egypt-leaves-rates-on-hold-in-august-meeting\/","url_meta":{"origin":568438,"position":3},"title":"In line with consensus, Central Bank of Egypt leaves rates on hold in August meeting","author":"enterpriseam admin","date":"16 August 2020","format":false,"excerpt":"CBE leaves rates on hold, in line with expectations: The Central Bank of Egypt (CBE) left interest rates unchanged for the fourth consecutive meeting on Thursday, citing persistent global uncertainty caused by the covid-19 pandemic, the bank said in a statement (pdf). \u201cWith the ongoing high level of uncertainty, and\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/8\/120.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":595676,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/08\/04\/egypts-economic-conditions-could-allow-cbe-to-accelerate-easing-cycle-hc-securities\/","url_meta":{"origin":568438,"position":4},"title":"Egypt\u2019s economic conditions could allow CBE to accelerate easing cycle -HC Securities","author":"enterpriseam admin","date":"4 August 2019","format":false,"excerpt":"Egypt\u2019s economic conditions could allow CBE to accelerate easing cycle, fully reverse monetary tightening by 2020 -HC Securities: Improving economic conditions and the anticipated cool-down of inflation once the full effect of fuel subsidy cuts wear off should give the Central Bank of Egypt (CBE) enough breathing room to begin\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":593415,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/11\/27\/investors-will-appreciate-policy-stability-from-amer-staying-on-as-cbe-governor-bloomberg-says\/","url_meta":{"origin":568438,"position":5},"title":"Investors will appreciate policy stability from Amer staying on as CBE governor, Bloomberg says","author":"enterpriseam admin","date":"27 November 2019","format":false,"excerpt":"Investors will welcome Amer getting a second term as CBE governor as it signals policy stability, Bloomberg says: Tarek Amer getting a second term as CBE governor is an indicator that there will be policy stability at the central bank over the next four years, a note that will be\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2018\/12\/2527.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/568438","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=568438"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/568438\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/568432"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media\/568439"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=568438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=568438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=568438"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=568438"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=568438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}