Cairo: Egypt’s parliament confirmed central bank Governor Tarek Amer will hold the role until 2023, a vote of confidence in the man who steered the North African nation through a dramatic currency devaluation that restored economic stability.
The granting of a new four-year term, backed on Thursday by a majority of lawmakers in the assembly, comes as the country reaches the end of a sweeping three-year International Monetary Fund-backed reform programme and mulls the shape of any future agreement with the Washington-based institution.
Amer’s reappointment will be “welcomed by investors as a sign that the government remains committed to orthodox policymaking,” London-based Capital Economics said in a note, describing his first term as a “success.”
Amer, a former president of the National Bank of Egypt, the country’s largest state-owned lender, began his stint in late October 2015 as Egypt, feeling the after-effects of years of unrest, reeled from a critical dollar shortage. Late the following year, the pound was devalued by about half and the government began cutting subsidies to help secure a $12 billion IMF loan.
Under Amer, the central bank ratcheted interest rates to a record-high to stem annual inflation that at one point topped 30 per cent. As that price-growth slowed dramatically, Egypt benefited from having one of the world’s largest real rates and a stable currency, making its debt markets a favourite for international investors.
Now with the fastest-growing economy in the Middle East and inflation at its lowest in almost a decade, authorities will have to strike a balance between cutting rates to spur much-needed enterprise and maintaining Egypt’s reputation as a carry-trade darling. The proportion of the 100 million population living in poverty has increased since 2016, and the government is striving to bring in foreign investment to help create jobs.
With authorities sticking to orthodox policies, inflation will likely remain low, allowing the central bank to make as many as 225 basis points of interest-rate cuts by the end of 2020, Capital Economics said.