Y-o-Y loan growth strong at 18.2% Y-o-Y; retail is the only segment displaying positive M-o-M growth in November: Total system loan growth slowed to 0.5% M-o-M in November, down from 1.2% in October, as loans to the private corporate sector fell 0.3% M-o-M in November (compared to +1.0% in October). Loans to the public business sector were flat M-o-M, compared to +1.5% in October. However, retail loan growth picked up 2.9% M-o-M in November, up from 1.6% in October. On a Y-o-Y basis, total loan growth improved slightly to 18.2% in November, up from 18.0% in October, driven by an acceleration in retail loan growth to 21.2% Y-o-Y in November, compared to 18.2% in October. Growth in loans to the private corporate sector decelerated slightly to 14.4% Y-o-Y in November, down from 15.3% a month earlier. We note that credit growth numbers are likely to have been understated in EGP terms, given the 2.5% appreciation of the EGP versus the USD during November.   Deposit growth decelerates to 0.9% M-o-M, but remains strong Y-o-Y: System deposit growth slowed to 0.9% M-o-M in November, compared to 1.4% in October, as foreign currency deposits fell 1.9% M-o-M in November (compared to +2.2% in October) and offset the increase in EGP-denominated deposits of 1.6% M-o-M (up from 1.2% in October), which should have been boosted by the increase in rates on three-year CDs by state-owned banks in mid-November. We note, however, that in USD terms, foreign currency deposits expanded 0.6% M-o-M in November. On a Y-o-Y basis, deposit growth remained broadly unchanged, at 21.3% in November, compared to 21.5% in October. Deposit dollarisation declined slightly to 17.5% in November, compared to 18.0% a month earlier. The loan-to-deposit ratio was roughly stable M-o-M at 45.6% in November.   Depletion of net foreign assets continues: Broad money supply (M2) decelerated marginally in November to 19.4% Y-o-Y from 19.7% Y-o-Y in October, again depressed by the EGP appreciation during the month. Money supply remained largely driven by expanding domestic asset base, in light of the rapid increase in government borrowing – whether from local banks or the Central Bank of Egypt – as well as expanding credit growth from the business and household sectors. November witnessed an interesting data point where the banking sector’s net foreign assets base has officially entered into the red, meaning banks now have accumulated foreign liabilities exceeding their foreign asset base. We noted earlier that banks have entered the red NFA position zone when excluding CBE deposits at local banks; now NFA position is in the red even when including these deposits. Meanwhile, CBE’s NFA negative position expanded in November with CBE assuming foreign currency liabilities of clients with temporary FX loans of cUSD1 billion. (Central Bank of Egypt, Elena Sanchez-Cabezudo, Mohamed Abu Basha, and Rajae Aadel)