The Central Bank of Egypt Reduces t
The Central Bank of Egypt Reduces the Reserve Requirement from 14 to 12%
The Board of Directors of the Central Bank of Egypt issued Decree No. 607 of 2012 (Egyptian Gazette, April 10th, 2012) reducing the reserve requirement imposed on banks operating in Egypt from 14% to 12%, effective as of April 17th, 2012. This allows banks to hold a higher amount of deposited funds and to use it in its ordinary course of business, thus releasing some additional liquidity in light of the current economic circumstances.
From a legal perspective, this Decree is issued by the Central Bank’s Board of Directors – and not by its Monetary Policy Committee because the Banking Law (No. 88 of 2003) stated in its Article (56) that reserve and liquidity requirements are to be issued by the Board of Directors itself and not any other delegated committees.
The Board of Directors of the Central Bank of Egypt issued Decree No. 607 of 2012 (Egyptian Gazette, April 10th, 2012) reducing the reserve requirement imposed on banks operating in Egypt from 14% to 12%, effective as of April 17th, 2012. This allows banks to hold a higher amount of deposited funds and to use it in its ordinary course of business, thus releasing some additional liquidity in light of the current economic circumstances.
From a legal perspective, this Decree is issued by the Central Bank’s Board of Directors – and not by its Monetary Policy Committee because the Banking Law (No. 88 of 2003) stated in its Article (56) that reserve and liquidity requirements are to be issued by the Board of Directors itself and not any other delegated committees.