Central bank withdraws over LE1 trillion from banks in monetary tightening move after dollar influx

Central bank withdraws over LE1 trillion from banks in monetary tightening move after dollar influx

The Central Bank of Egypt has withdrawn around LE1.05 trillion (US$22.4 billion) from commercial banks through open market operations, it announced on Tuesday. The measure is intended as a means to control the inflationary impact of Egypt’s increased money supply, as the country receives a huge influx of liquidity due to the landmark Ras al-Hikma agreement and renewed faith in the economy due to the reforms undertaken by the state, […]

The post Central bank withdraws over LE1 trillion from banks in monetary tightening move after dollar influx first appeared on Mada Masr.The Central Bank of Egypt has withdrawn around LE1.05 trillion (US$22.4 billion) from commercial banks through open market operations, it announced on Tuesday.

The measure is intended as a means to control the inflationary impact of Egypt’s increased money supply, as the country receives a huge influx of liquidity due to the landmark Ras al-Hikma agreement and renewed faith in the economy due to the reforms undertaken by the state, analysts told Mada Masr. 

The withdrawal via open market operations is a means of furthering a contractionary monetary policy in line with international recommendations for Egypt to control inflation, they said. 

The central bank can sell securities in weekly auctions to domestic