Regulatory Alerts2020-09-14
A circular letter dated September 14, 2020, in addition to postponing customers’ credit dues
The Central Bank of Egypt (CBE) has published a comprehensive plan to support all sectors affected by the spread of the novel coronavirus, which includes financial and monetary measures that aim to help the real economy recover from the economic shock caused by the pandemic. The plan covers several key aspects, including: 1. Maintaining the stability of the Egyptian pound against foreign currencies by providing liquidity support through various tools such as repurchase agreements, lending in local and foreign currencies, and facilitating transactions between banks and their overseas correspondent banks. 2. Supporting all sectors by easing credit conditions for individuals and businesses and implementing a unified methodology for assessing the ability of borrowers to pay back loans without imposing additional burdens on them or affecting their business activities. 3. Encouraging commercial banks to adjust their debt restructuring methods according to the current economic situation, as well as considering rescheduling interest payments and not including any financial charges that could have a negative impact on borrowers. 4. Ensuring compliance with the guidelines issued by the Egyptian Central Bank, particularly those related to assessing the creditworthiness of debtors, as well as setting up provisions for dealing with possible losses without causing financial hardship for clients. 5. Requiring banks to analyze and assess the overall risks associated with the current economic situation and conduct stress tests to determine the impact of these challenges on their assets and various sectors. This concise summary aims to provide a clear understanding of the Egyptian Central Bank's comprehensive plan, which involves both financial and monetary measures to support all sectors affected by the spread of the novel coronavirus while ensuring stability in the country's economy.