Circular dated December 29, 2012 regarding the rules regulating the balance limits in banks’ currency positions

Greetings and after,

I would like to refer to the decision of the Board of Directors of the Central Bank of Egypt at its meeting held on 9 September 1993 regarding the rules regulating the balance limits in currency positions at banks, and to the subsequent circular letters issued in this regard, specifically regarding the value of the surplus or deficit in the currency position and its ratio to the capital base.

In light of the Central Bank of Egypt's keenness to keep pace with the supervisory standards issued by it with the developments of the Egyptian banking market to ensure the safety of banks' financial positions and guarantee the good performance of their operations, the following must be observed:

1. Regarding the value of the surplus in the foreign currency position at any bank operating in Egypt, including branches of foreign banks:
   The value of the surplus in any foreign currency position must not exceed 1% of the capital base.

   The value of the total surplus in foreign currency positions must not exceed 2% of the capital base.

2. Regarding the value of the deficit in the currency position at any bank operating in Egypt, including branches of foreign banks:
   The value of the deficit in any currency position must not exceed 10% of the capital base.

   The value of the total deficit in currency positions (foreign or local) must not exceed 20% of the capital base.

3. The surplus or deficit in the Egyptian Pound balance is subject to a limit of 10% of the capital base.

4. The concept of the capital base applies according to the definition provided in the Basel Capital Adequacy Standard and its equivalent at branches of foreign banks, taking into account what was stated in the decision of the Board of Directors of the Central Bank of Egypt at its meeting held on 18 December 2012, issued pursuant to Circular Letter No. 318 dated 24 December 2012 regarding the minimum limit for the Basel Capital Adequacy Standard in the context of implementing Basel decisions.

5. Banks are committed to the prescribed limits as of 30 December 2012 at the end of each working day, and the ratios of surplus or deficit in the position of any currency and the total surplus or deficit in currency positions to the capital base must not exceed double the limits mentioned above during the day.

6. The rest of the previous instructions apply to matters not covered by the above text.

Please be kind enough to alert regarding taking the necessary measures concerning the above.

And please accept the highest respect,,,
Gamal Naguib