Most banking experts said the US$ 2 billion Qatari deposit at the Central Bank of Egypt (CBE) will have a temporary impact on Egypt’s foreign currency reserves that fell by about US$ 21.5 billion for the period from the start of 2011 to the end of last July, registering US$ 14.4 billion. Experts said the deposit will have a little impact on the economy amid the continuation of cash outflows, resources shortages and increase in imports. The deposit will be used to meet the CBE’s liabilities towards foreign countries, experts said.
Osama El Manialawy, assistant general manager of the treasury department at Société Arabe Internationale de Banque (SAIB), said the Qatari deposit at CBE will have limited effect on the economy as there is still an unstable situation and cash inflows continue to fall as tourism income and direct investment revenues retreated.
El Manialawy stressed on the importance of reducing imports from outside the country and conserving resources so as to increase dollar resources and offset the foreign currency reserves.
The Qatari deposit will raise the country’s foreign cash reserves for a short period, but they will decline again if the current political and economic unrest continues, El Manialawy added.
Haitham Abdel Fattah, head of the treasury department at the Industrial Development and Workers Bank of Egypt, said the extent to which the Qatari deposit will boost the Egyptian economy will depend on Egypt’s liabilities and the economic situation in the upcoming period.
If the Egyptian market continues with low growth rate, the Qatari deposit will not have a noticeable impact on the economy especially amid the continuous retreat of foreign currency reserves, Abdel Fattah added.
Abdel Fattah emphasized the importance of fostering the security in the country, supporting transparency and integrity of decision making and creating a positive atmosphere for luring direct investments through solving the current obstacles facing investors such as the frequent power outages that hit the country for about two months.
