Overseas investment made by Egyptian banks dwindled in the first half of 2010 by nearly 22.7 percent, with a nearly LE16.9-billion decrease between January and July of this year.
Egypt's total overseas accounts reached LE57.3 billion as of July of this year as compared to nearly LE74.2 billion in January, according to the Central Bank of Egypt (CBE)'s August, 2010 report.
A CBE report in May also revealed sharp reductions in overseas bank accounts, which reached LE58.3 billion compared to LE98.3 billion in April. This amounts to a fall of almost LE40 billion over a one-month period, making it the largest single drop in overseas bank accounts within the last four years.
According to CBE indicators, overseas bank accounts stood at LE77.1 billion mid-2009–at the peak of the global economic crisis–whereas before the onset of the crisis in late 2008 they had amounted to LE122 million. In June, 2008, accounts stood at nearly LE122 billion, and in June, 2007 they stood at LE124.3 billion.
Ahmad Qora, former chairman of the National Bank of Egypt, attributed the sharp declines to government-issued dollar bonds that had been purchased by local banking entities.
In April, the Ministry of Finance issued government bonds to the tune of nearly LE1.5 billion at long-term rates of US$500 million over a 30-year period and US$1 billion over a ten-year period.
Arab-African International Bank chairman Ahmed Selim believes the Greek debt crisis–and its recent expansion to include a number of Eurozone countries–represented the main reason for the decline, as the unfolding European crisis had made union banks apprehensive about the anticipated impact on global financial centers.
Translated from the Arabic Edition.
