Egypt’s newly named central bank chief sought to reassure investors on Thursday there was no need to be worried about the situation on the Egyptian currency market, saying the bank had “all the tools” to intervene if it saw speculation.
Hisham Ramez will be taking the reins in the midst of Egypt’s most acute financial crisis since the uprising that pushed Hosni Mubarak out of the presidency in early 2011.
An surge of political unrest in November sent Egyptians rushing to buy dollars for the Egyptian pound out of fear that the pound would tumble or the government would put capital controls in place.
Reserves have fallen by $21 billion in the two years since Egypt’s popular uprising to $15 billion, equal to less than three months of imports.
The central bank, saying the country’s foreign reserves had reached a “minimum and critical limit”, announced a new currency system on Dec. 29 to stabilize the pound. Since then the pound has fallen to record lows.
“The matter is not out of control. On the contrary, at any time we can control it,” Ramez told reporters shortly after President Mohamed Morsi named him as the new governor.
“The central bank has all the tools to enable it to intervene at anytime it feels there is speculation or anything against the market.”
Ramez, who worked as deputy central banker during the financial turbulence of Egypt’s uprising in early 2011, is expected to assume his duties on Feb. 3 after Morsi accepted the resignation of his predecessor, Farouk el-Okdah, the presidency said in a statement.
A veteran banker, Ramez won praise from economists for his deft handling of the financial turmoil in the weeks after the uprising, when billions of dollars of fled the country and the currency came under enormous pressure.
Far more than Okdah, who rarely appears before the media, Ramez took on a public role during the troubles, often acting as the central bank’s mouthpiece.
Ramez’s appointment has to be approved by the upper house of parliament, which holds legislative powers until Egypt votes for a permanent new lower house in an election expected in the next few months.
The upper house is dominated by Morsi’s Islamist supporters.
Egypt’s currency continued its slide on Thursday, with the central bank allowing it to weaken by about half a percentage point per day. It has lost 5.5 percent in the last two weeks.
“We are looking at prices constantly,” Ramez told reporters. “The situation is not out of control. There is no cause for concern. What concerns the central bank is that the market is normal and balanced. As the price rises it also falls. Supply and demand … are what are necessary.”
Ramez has been a banker for three decades, joining Bank of America in Bahrain in 1982 in its foreign exchange and money market division before moving in 1988 to Arab Banking Corporation as vice president.
In 1996 he returned to Egypt to run two medium-sized banks, Egyptian Gulf Bank and then, from 2006, Suez Canal Bank. In 2007 he moved to the central bank, where he worked as a board member and deputy governor until 2011.
Since December 2011 he has been vice chairman of Egypt’s biggest publicly traded bank, Commercial International Bank (CIB).
Reuters
