Egypt’s broad money (M2) supply growth slowed to 14% Y-o-Y in November from 15.4% in October and from a peak of 25.4% in February, data released by the Central Bank of Egypt (CBE) showed. The slowdown was largely driven by a continued widening in the net foreign liability position of the banking sector, which stood at USD7.3bn vs. USD5.5bn in October. The larger liability position was in turn driven by both a USD1bn drop in foreign assets, in line with a USD0.9bn drop in foreign holdings of T-bills during the month, and a USD0.8bn increase in foreign liabilities; the latter have increased by USDUSD2.7bn in the past three months. Meanwhile, the CBE’s net foreign asset base dropped slightly to USD15.4bn in November from USD16bn in October, mostly as the CBE accumulated USD0.6bn of foreign liabilities after extending the repo agreements with banks. On the other hand, net domestic liabilities growth remained largely stable at 16.3% Y-o-Y, as a slowdown in government borrowing balanced some acceleration in private sector credit growth.

Mohamed Abu Basha