• Deceleration in loan growth as private corporate loans fall M-o-M Total loans fell 0.1% M-o-M in July (from 1.7% M-o-M growth in June), as corporate loans declined 0.5% M-o-M. On a Y-o-Y basis, loan growth decelerated to 16.4% Y-o-Y in July from 17.2% Y-o-Y in June, on weaker loan growth to the private and public sectors. Private corporate loan growth fell to a 4-month low of 11.4% Y-o-Y in July, from 12.5% Y-o-Y in June. Retail loan growth was broadly stable M-o-M, and remained solid at 18.5% Y-o-Y. Weak corporate loan growth in July was driven in our view by seasonality (summer season), in addition to the ongoing shortage of hard currency.
• Y-o-Y deposit growth stable at 18.6% M-o-M deposit growth slowed to 1.3% in July, compared to 1.9% in June, on slower growth in EGP and USD-denominated deposits. Y-o-Y deposit growth was unchanged at 18.6% in July. On a M-o-M basis, demand deposits growth weakened further, down 0.1% in July, compared to an 0.8% M-o-M increase in June. The loan-to-deposit ratio at the system level fell slightly to 45.4% in July, compared to 46.1% in June. Deposit dollarisation was stable M-o-M at 18.5% in July.
• Money supply slows as NFAs drop further in red; credit growth slows Broad money supply growth slowed to 17.9% Y-o-Y in July from 18.6% Y-o-Y in June largely due to decelerating private credit growth (13.4% Y-o-Y from 14.2% Y-o-Y in June). The net foreign asset position went further into the red showing a negative balance of USD11.8bn versus USD9.8bn in June. This was mostly driven by the CBE’s foreign assets dropping cUSD2bn on debt payments of USD1bn to Qatar and USD0.7bn to the Paris Club as well as in line with NIR drop for the month.

Elena Sanchez-Cabezudo, CFA
Mohamed Abu Basha
Rajae Aadel