Industry Forecast - Outlook Largely Positive As Currency Float Feeds Through - AUG 2017


BMI View: The outlook for the Egyptian banking sector is largely constructive, as we expect the positive effects of a November 2016 currency float to outweigh the negatives. Easing liquidity constraints in particular will have a positive effect on the sector.

BMI View: The outlook for the Egyptian banking sector is largely constructive, as we expect the positive effects of a November 2016 currency float to outweigh the negatives. Easing liquidity constraints in particular will have a positive effect on the sector.

We hold a largely positive outlook on the Egyptian banking sector in 2017. Despite there being significant challenges posed by the economic reforms which took place at the close of 2017, these reforms will also help ease some of the constraints which weighed on the sector in the years immediately prior. Weak demand for credit among households as inflation soars and the central bank tightens monetary policy will be largely offset by easing liquidity shortages which have enabled banks to resume normal service.

Loan Growth To Slow On Devaluation
Egypt - Loan & Deposit Growth
e/f = estimate/forecast. Source: CBE, BMI

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