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The Central Bank of Egypt Reduces t

The Central Bank of Egypt Reduces the Reserve Requirement Once More from 12% to 10%
In April of this year, the Board of Directors of the Central Bank of Egypt (“CBE”) issued Decree No. 607 of 2012 reducing the reserve requirement imposed on banks operating in Egypt from 14% to 12%, effective as of 17 April 2012.[1] In early June, the Board of Directors of CBE further reduced the reserve requirement from 12% to 10% (the “Decision”),[2] thus allowing banks to hold a higher amount of deposited funds and to use it in their ordinary course of business, releasing some additional liquidity in light of the current economic circumstances. This Decision is issued by CBE’s Board of Directors – and not by its Monetary Policy Committee – because Article (56) of the Banking Law No. 88 of 2003 states that reserve and liquidity requirements are to be issued by the Board of Directors itself and not any other delegated committee.   [1] Central Bank of Egypt Decision No. 607/2012 reducing the reserve requirement imposed on banks operating in Egypt, Egyptian Gazette, Issue No. 84, 10 April 2012. [2] Central Bank of Egypt Decision No. 1012/2012 reducing the reserve requirement from 12% to 10%, Egyptian Gazette, Issue No. 128, 4 June 2012.
In April of this year, the Board of Directors of the Central Bank of Egypt (“CBE”) issued Decree No. 607 of 2012 reducing the reserve requirement imposed on banks operating in Egypt from 14% to 12%, effective as of 17 April 2012.[1] In early June, the Board of Directors of CBE further reduced the reserve requirement from 12% to 10% (the “Decision”),[2] thus allowing banks to hold a higher amount of deposited funds and to use it in their ordinary course of business, releasing some additional liquidity in light of the current economic circumstances. This Decision is issued by CBE’s Board of Directors – and not by its Monetary Policy Committee – because Article (56) of the Banking Law No. 88 of 2003 states that reserve and liquidity requirements are to be issued by the Board of Directors itself and not any other delegated committee.   [1] Central Bank of Egypt Decision No. 607/2012 reducing the reserve requirement imposed on banks operating in Egypt, Egyptian Gazette, Issue No. 84, 10 April 2012. [2] Central Bank of Egypt Decision No. 1012/2012 reducing the reserve requirement from 12% to 10%, Egyptian Gazette, Issue No. 128, 4 June 2012.