02:39 PM
Wednesday 17 August 2022
I wrote – Manal Al-Masry:
Tarek Amer, Governor of the Central Bank of Egypt, completed his second term before it was completed by announcing today, Wednesday, his resignation.
President Abdel Fattah El-Sisi issued a decision this morning, appointing Amer as an advisor to the President of the Republic. Al-Sisi thanked Tarek Amer for his efforts during his tenure in charge of the Central Bank, and accepted his apology for continuing in his position.
Amer’s resignation from his position came more than a year before the end of his second term in November 2023 and after 7 years of assuming the position of governor from November 2015 to succeed Hisham Ramez, who also submitted his resignation a few months before the end of his term.
Banking sources that Masrawy spoke to attributed Amer’s resignation to several main reasons, including the continuation of disputes between the governor and the private sector regarding opening documentary credits to importers, in addition to the stalled negotiations with the International Monetary Fund, which is considering pumping a loan to Egypt.
The sources pointed out that one of the most important reasons for Amer’s resignation was the continuation of disputes with the private business sector since the decision was issued to stop work on collection documents on most imported goods, which led to the disruption of some businesses and the faltering of the industry.
The Central Bank had issued a decision in mid-February to stop dealing with collection documents in all import operations, within the framework of the directives of the governance of import operations, and to activate the system of pre-registration of shipments, which will begin to be applied mandatory as of the beginning of next March in full, with the exception of 15 strategic commodities to reduce pressure on foreign exchange Which recorded a decline due to the Russian-Ukrainian crisis and its global repercussions.
The Central Bank’s decision met with objections from a number of business organizations, including the Federation of Industries, the Egyptian Businessmen Association and the General Federation of Chambers of Commerce, while the Central Bank, on the other hand, stuck to its position on implementing the decision, which prompted these parties to address the Prime Minister.
In an attempt to calm the atmosphere, President Abdel Fattah El-Sisi issued a directive last May to exclude production requirements and raw materials from opening documentary credits in banks before the import process, and to return to the old system through collection documents.
He announced the formation of a working group headed by the Prime Minister, with the membership of the Central Bank Governor, the Minister of Finance, the Minister of Trade and Industry, and other competent authorities, to carry out periodic follow-up and regular evaluation of the system of import procedures and the extent to which they meet the needs of the production process.
In April, the banks approved new instructions that prevent the acceptance of foreign exchange resources of unknown source or obtained from exchange companies, in import operations, which fueled the atmosphere between the two parties.
The sources added that the second reason is the failure to reach an agreement with the International Monetary Fund regarding obtaining a new loan, which requires greater flexibility in the exchange rate of the pound against the dollar.
The International Monetary Fund announced in March that Egypt had requested assistance. Last July, the fund said that it had held fruitful discussions with the Egyptian authorities on the economic policies and reforms that will be supported by the extended fund facilities in the coming period.
According to the fund, Egypt is negotiating to obtain the Extended Fund Facility (EFF), which is one of the programs that the fund provides to its members.
Last May, Prime Minister Mostafa Madbouly predicted that Egypt would reach an agreement with the IMF within months.
Despite the pound’s drop by 22% against the dollar from last March until now, the agreement has not yet been reached.
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