History of the Central Bank of Egypt

History of the Central Bank of Egypt

How The institution that controls everything about the Egyptian Pound works?

Share

The Central Bank of Egypt is responsible for the country’s monetary policy. It also sets banking laws, supervises banks, and decides the interest rate with which banks operate.

 

Founding of the Central Bank of Egypt

 

In 1960, a presidential decree was issued to found the Central Bank of Egypt, and in 1961 it was operational. Before 1961, the tasks that the Central Bank performed were the responsibility of the National Bank of Egypt, which included printing the Egyptian Pound. After 1961, the National Bank of Egypt relinquished those tasks, and became a regular governmental bank.

 

governor is the one responsible for issuing policies and decisions. He is appointed by president, and his term lasts for four years.

 

Central Bank of Egypt’s characteristics and tasks:

 

  • The Central Bank is an independent entity, so it self-governs and no other entity has power over it. However, it usually coordinates with the government to decide the country’s monetary policy.
  • It decides when to print money and how much money to be printed.
  • It is in charge of the country’s foreign currency and gold reserves.
  • It supervises Egyptian banks’ operations and penalizes them if needed.
  • It monitors and controls foreign currency within the Egyptian market. That is why in 2016, during the dollar crisis, it was difficult to transfer foreign currency abroad because the Central Bank wanted all foreign currency to remain in the Egyptian market. So much so that multinational companies were unable to transfer their profits to their headquarters abroad.
  • It monitors market prices and inflation, and sets policies accordingly.

 

Who issues the Central Bank’s policies?

 

The Central Bank’s governor is the one responsible for issuing policies and decisions. He is appointed by president, and his term lasts for four years. The candidate is usually someone with extensive experience within the Banking sector, so it’s usually a former Managing Director of a bank. Currently, the governor is Tarek Amer, who used to be the Managing Director of the National Bank of Egypt. Since its founding, there have been 13 Central Bank governors.

Editors Choice