annual report 2016/2017 · 2018-07-18 · ii central bank of egypt – annual report 2016/2017...

Central Bank of Egypt

Annual Report

2016/2017

Board Members

Mr. Tarek Amer

Governor and Chairman of the Board

Ms. Lobna Helal Deputy Governor

Mr. Gamal Mohamed Negm Deputy Governor

Mr. Kamal Abu Elkhair Financial and Economic Expert

Mr. Ahmed Ashraf Kouchouk Representative of the Ministry of Finance

Mr. Sherif Samy Chairman of EFSA

Mr. Yahia Dakrouri Legal Expert

Dr. Laila Ahmed Al Khawaga Economic Expert

I

Central Bank of Egypt – Annual Report 2016/2017

Preface

I have the pleasure to present the Annual Report of the Central Bank of Egypt (CBE) for FY 2016/2017. The Report highlights and analyzes major domestic economic developments, in the areas of economic growth, inflation, state budget, balance of payments, and foreign trade. It also sheds light on CBE's activities, along with the main monetary, credit and banking developments.

Over the course of FY 2016/2017, the CBE decided on November 3, 2016 to

liberalize the LE exchange rate, so banks are at liberty to quote and trade at any exchange rate. The decision was intended to restore FX trading to formal banking channels and eliminate the parallel market under the framework of the Economic Reform Program that enables the Egyptian economy to address the existing challenges, unleash its potentials, and achieve growth and employment rates in a way that is commensurate with Egypt's capabilities and utilizes the full range of its human, natural, and material resources. The economic performance indicators proved, during the reporting year and until the publishing of this Report, that the decision of the exchange rate liberalization helped in raising the growth rates, quelling distortions, achieving equilibrium, and getting the economy on the right track. This is illustrated as follows:

Real GDP growth (at factor cost) increased to 3.6 percent in the reporting

year (from 2.3 percent in FY 2015/2016). Real GDP growth at market prices reached 4.2 percent in the year under review, against 4.3 percent in the year of comparison. During the preparation of the Report, real GDP growth (at factor cost) picked up to 5.2 percent in Q1 of FY 2017/2018 (from 1.7 percent during the same quarter a year earlier). Concurrently, unemployment fell to 12.0 percent of the total labor force in Q4 of the reporting year (April/June), from 12.5 percent in the corresponding quarter of the previous FY. It continued to decline reaching 11.9 percent and 11.3 percent during Q1 and Q2 of FY 2017/2018, respectively.

Regarding the monetary policy, the CBE proactively adopted a tightening monetary policy to contain the inflationary pressures resulting from the liberalization of the exchange rate; the restructuring of fuel subsidies; and applying the value added tax (VAT). In this context, the MPC raised the CBE’s key interest rates by 700 bps during the period from 3 November 2016 to 6 July 2017. Moreover, some adjustments were made to the operational structure of implementing the monetary policy to include deposit acceptance operations with longer maturities. The average liquidity absorbed by the CBE reached LE 455.3 billion at end of June 2017, which further increased to LE 537.0 billion at end of December 2017. Furthermore, the CBE raised the required reserve

II


ratio for banks at the CBE from 10.0% to 14.0%. In addition, the MPC decided in its meetings held on the 17th of August, 28th of September, 16th of November, and the 28th of December 2017 to keep the key interest rates at the CBE unchanged.

As a result of adopting a tightening monetary policy, inflation rates noticeably declined. The annual headline and core inflation rates retreated for the sixth consecutive month to record 17.1 percent, and 14.4 percent, respectively, in January 2018, after peaking in July 2017 at 33.0 percent, and 35.3 percent, in order. Consequently, the MPC decided in its meeting held on the 15th of February 2018 to lower the key interest rates by 100 bps. It is to be noted in this respect that the CBE announced for the first time in May 2017 that it is targeting an inflation rate of 13 percent (+/-3%) in Q4 of 2018 and single-digit rates thereafter.

Foreign flows to the banking system have increased, as banks' resources of foreign currencies since the liberalization of the exchange rate till the end of December 2017 registered US$ 60.0 billion. In this regard, it should be noted that restrictions on foreign currency cash withdrawals and deposits were lifted and banks were allowed to execute customers’ transfer requests without any maximum limits.

Financial positions in foreign currencies at the CBE and banks have improved. In this context, net foreign assets at the banking system reversed to a positive balance, recording LE 61.1 billion worth at end of June 2017 (from a negative balance of LE 87.4 billion worth at end of June 2016), and further improved reaching LE 214.1 billion worth at end of December 2017, the highest record since October 2011.

The CBE managed to rebuild its net international reserves (NIRs) as they hiked by US$ 13.8 billion or 78.4 percent in FY 2016/2017, to US$ 31.3 billion, covering as such 6.6 months of merchandise imports at end of June 2017. At end of February 2018, the NIRs further improved to US$ 42.5 billion (covering 8.6 months of merchandise imports), to record thereby their best historical levels at the CBE. This reflects the confidence in the Egyptian economic performance and banking system and helps meet the state's financial dues.

The BoP ran an overall surplus of US$ 13.7 billion in FY 2016/2017 (of which, US$ 12.2 billion were recorded in November/June 2016/2017, immediately after the liberalization of the exchange rate), against an overall deficit of US$ 2.8 billion in the previous FY. The capital and financial account recorded a net inflow of US$ 29.0 billion (against US$ 21.2 billion), while the current account deficit retreated by 21.5 percent to US$ 15.6 billion (against US$ 19.8

III


billion). At the time of preparing the Report, the BoP unfolded an overall surplus of US$ 5.1 billion in July/Sept. 2017/2018 (against US$ 1.9 billion in the same period a year earlier). This was due to the fact that the current account deficit declined to register only US$ 1.6 billion (against US$ 4.8 billion), and the capital and financial account recorded a net inflow of US$ 6.2 billion (against US$ 7.2 billion).

According to the initial indicators issued by the Ministry of Finance, the preliminary final accounts of FY 2016/2017 revealed that the overall deficit as a percentage of GDP declined to 10.9 percent during the year under review, from 12.5 percent a year earlier. The primary deficit as a percentage of GDP also decreased to 1.8 percent from 3.5 percent.

The domestic public debt retreated to 91.1 percent at end of June 2017, from 96.7 percent at end of June 2016. Likewise, the gross domestic debt of the government moved down to 77.4 percent from 84.4 percent.

The IMF and many other international rating agencies have lauded the outcomes of the Economic Reform Program and the indicators achieved so far by the Egyptian economy. Some of these agencies have raised Egypt's outlook from "stable" to "positive" and lauded the success of the pound liberalization. Moreover, the Ministry of Finance successfully issued euro bonds worth US$ 4 billion in 5, 10 and 30 year tranches, which attests to the growing confidence of foreign investors in the Egyptian economy. The purchase requests exceeded US$ 12 billion at good yields in the first few hours after the issuance despite the volatility of the international stock markets (at the time of floating the bonds), which resulted in higher yields on US bonds to hit their highest levels in 4 years.

Finally, I would like to thank the dedicated staff of the CBE and the banking

system for their tireless work. May God guide our steps to the right path and help us serve our dear country for its progress and prosperity.

Governor of the Central Bank of Egypt

Tarek Hassan Amer


Contents of the Annual Report

Main Indicators of the Performance of Egyptian Economic Sectors

A - B

Executive Summary I - V

Chapter 1 Central Bank of Egypt

1/1 Monetary Policy 1

1/2 Reserve Money 4

1/3 Payment Systems and Information Technology (IT) 7

1/3/1 RTGS and SWIFT Local Services 8

1/4 Domestic Liquidity and Counterpart Assets 10

1/5 Supervision Sector 14

1/6 Management of the Foreign Exchange Market and International Reserves

17

1/6/1 Foreign Exchange and Dollar Interbank Markets 17

1/6/2 Management of International Reserves 18

1/7 Domestic Public Debt and External Debt 18

1/7/1 Domestic Public Debt 18

1/7/1/1 Debt of the Government (Net) 19

1/7/1/2 Net Debt of Public Economic Authorities 20

1/7/1/3 Net Debt of NIB 20

1/7/1/4 Intra-debt 20

1/7/2 External Debt 21

1/8 Human Resources Development (HRD) 24

1/8/1 Activity of EBI 24 1/8/2 CBE Staff Programs 26

Chapter 2 Banking Developments

2/1 Financial Position 27

2/2 Deposits 29

2/3 Lending Activity 30

2/4 Cash Flows 32

2/5 Bank Performance Indicators 34


Chapter 3 Macroeconomic Developments

3/1 Gross Domestic Product (GDP) 39

3/1/1 Labor Force, Employment and Unemployment 42

3/2 Inflation 43

3/3 Public Finance 47

Budget Sector

3/4 Balance of Payments and Foreign Trade 51

3/4/1 Balance of Payments 51

3/4/1/1 Current Account 52

3/4/1/2 Capital and Financial Account 57

3/4/2 Foreign Trade 59

3/4/2/1 Merchandise and Sectoral Distribution of Exports by Degree of Processing

59

3/4/2/2 Merchandise and Sectoral Distribution of Imports by Degree of Use

61

3/4/2/3 Foreign Trade by Geographical Distribution 63

3/4/2/4 Foreign Trade by Main Commodity and Merchandise Balances

66

3/5 Non-Banking Financial Services Sector 69

3/5/1 Stock Market 69

Annex

Statistical Section

A


Main Indicators of the Performance of Egyptian Economic Sectors FY

2015/2016 2016/2017 Real Sector

Real GDP growth rate at factor cost (%), of which : 2.3 3.6 The share of the private sector (percentage point) 1.9 3.1

Real GDP growth rate at market prices (%), of which: 4.3 4.2 Share of private consumption (percentage point) 3.8 3.4 Share of public consumption (percentage point) 0.5 0.3 Share of capital formation (percentage point) 1.6 1.8 Share of net external demand (exports of goods and services minus imports of goods and services) (percentage point) -1.6 -1.3

CPI inflation (urban) (%) 14.0 29.8 PPI inflation (%)

5.7 34.9

Financial & Monetary Sector

Domestic liquidity growth rate M2 (%) 18.6 39.3 Domestic liquidity growth rate M2 (%) (excluding the impact of change in exchange rate)+ - 22.5 Growth rate of time and saving deposits in local currency (%) 19.4 26.6 Growth rate of foreign currency deposits (%) 23.1 114.4 Growth rate of foreign currency deposits (%) (excluding the impact of change in exchange rate)+ - 5.3 Foreign currency deposits/ Total deposits (dollarization rate) (%) 18.5 27.8 Foreign currency deposits/ Total deposits (dollarization rate) (%) (excluding the impact of change in exchange rate)+ - 15.9 Net claims on the government /Total credit (%) 67.3 63.6 Private business sector credit/ Total credit (%) 20.5 23.9 Household sector credit/ Total credit (%) 8.4 7.7 Public business sector credit/ Total credit (%) 3.8 4.8 Change in net claims on the government/Change in total credit (%) 75.4 49.9 Change in private business sector credit/Change in total credit (%) 11.6 36.9 Change in household sector credit/ Change in total credit (%) 6.8 4.7 Change in public business sector credit/ Change in total credit (%) 6.2 8.5 Net international reserves (US$ mn) at end of the period 17546 31305 NIR in months of merchandise imports 3.7 6.6

+ Due to the liberalization of exchange rate on 3 Nov. 2016.

B Central Bank of Egypt – Annual Report 2016/2017

Main Indicators of the Performance of Egyptian Economic Sectors (cont.)

FY

2015/2016 2016/2017 Banks’ Financial Soundness Indicators (FSIs), of which: Capital adequacy ratio (%)* 14.0 14.5 Non-performing loans/Total loans (%) 6.0 5.5 Loan provisions/ Non-performing loans (%) 99.1 99.1 Return on average assets** (%) 1.5 2.0 Return on average equities** (%)

24.4 30.9

External Sector Trade Balance/GDP (%) -11.5 -15.1 Services Balance/GDP (%) 1.9 2.9 FDI in Egypt (net)/GDP (%) 2.1 3.4 Net transfers/ GDP (%)

5.0 7.4

External Debt External debt/GDP (end of June) (%) 16.6 33.6++ Short-term external debt/Total external debt (end of June) (%) 12.6 15.5 External debt service/Exports of goods and services (%)

14.6 19.1

Budget Sector+ Revenues/GDP (%) 18.1 19.0 Expenditures/GDP (%) 30.2 29.7 Total wages/Total public revenues (%) 43.5 34.2 Primary Surplus (+)/deficit (-)/GDP (%) -3.5 -1.8 Overall Surplus (+)/deficit (-)/GDP (%) -12.5 -10.9 Gross domestic public debt/GDP (%) 96.7 91.1

* Including the capital conservation buffer. ** According to the latest audited financial statements for FY 2016 and FY 2015. The fiscal year

ends on June 30 for public sector banks and on December 31 for other banks. + Source: Ministry of Finance

++ Affected by the liberalization of exchange rate on 3 Nov. 2016.

I


Executive Summary

The Annual Report for FY 2016/2017 displays the CBE’s activity and the main monetary, credit and banking developments at the domestic level. It also sheds light on major economic developments, with particular emphasis on economic growth, inflation, state budget, balance of payments, external trade, and key decisions of the CBE's Board of Directors.

Real GDP growth at factor cost rose to 3.6 percent in FY 2016/2017 (from 2.3

percent a year earlier). On the supply side, the growth in the reporting year reflects the higher contributions of the sectors of tourism, extractions, manufacturing, real-estate, and communications. On the demand side, GDP growth at market price (4.2 percent) came from domestic demand that added 5.5 percentage points (3.7 points for final consumption and 1.8 point for capital formation), thereby remaining the main driver of growth; whereas external demand registered a negative 1.3 percentage point.

Investments (at current prices) totaled LE 325.3 billion in the reporting year, up

by 12.2 percent, compared with LE 290.0 billion a year earlier. As for monetary policy and exchange rate management, the CBE continued to

pursue price stability, being the ultimate objective of the monetary policy, by working to bring inflation to such appropriate and stable levels, so as to help build confidence, stimulate investments and spur economic growth to targeted levels. In FY 2016/2017, the Monetary Policy Committee (MPC) held seven meetings, leading eventually to a rise in key policy rates by 500 bps. Specifically, the overnight deposit and lending rates were raised from 11.75 percent and 12.75 percent, respectively, to 16.75 percent and 17.75 percent. The rate of the CBE's main operations and the discount rate were also raised from 12.25 percent to 17.25 percent each. This rise was consistent with the CBE's decision on November 3, 2016, to embark on several measures to adjust the foreign currency trading policy through liberalizing the exchange rates to give banks the liberty to quote and trade at any exchange rate. The decision was intended to restore FX trading to formal banking channels and eliminate the parallel market.

Regarding the main monetary and credit developments in FY 2016/17, reserve

money amounted to LE 577.6 billion at end of June 2017, up by LE 99.5 billion or 20.8 percent in the reporting year (against a retreat of LE 7.8 billion and 1.6 percent in the preceding FY). Domestic liquidity reached LE 2918.2 billion at end of June 2017 (or 84.1 percent of GDP for FY 2016/17), with an increase of LE 823.7 billion or 39.3 percent in the reporting year (or LE 470.3 billion or 22.5 percent, excluding the effect of the exchange rate liberalization on November 3, 2016), compared to LE 329.0 billion and 18.6 percent in the previous FY.

II


As regards banking developments, the CBE's BoD approved in its sessions on 7 April and 13 July 2016 the application of the capital conservation buffer to ensure that banks can cover losses that may arise in periods of economic stress or financial crises, with the aim of conserving the capital base of Egyptian banks. Banks are required to adhere to these regulations starting from either the 1st of January or the 1st of July 2016 (depending on the beginning of the fiscal year in each bank), in order to meet the required total ratio of 2.5 percent in January/July 2019. Additionally, the CBE's BoD approved on 13 July 2016, the regulations of liquidity risk management, and the application thereof started from July 2016 according to a set timetable.

The financial position of banks operating in Egypt (excluding the CBE) soared

by LE 1574.8 billion or 55.3 percent in FY 2016/17 (against LE 647.1 billion and 29.4 percent in the previous FY), reaching LE 4420.9 billion at end of June 2017 (127.4 percent of GDP in FY 2016/17 ). On the liabilities side, deposits accounted for more than two thirds of the rise, registering a pickup of LE 911.7 billion (or rising by LE 450.1 billion after excluding the effect of exchange rate liberalization). On the assets side, the increase mainly reflected the surge in both lending and discount balances by LE 483.7 billion (or by LE 199.1 billion after excluding the effect of exchange rate liberalization); and banks' deposits at the CBE by LE 401.2 billion.

Moving to banks' financial soundness indicators, the capital adequacy ratio at

banks, including the capital conservation buffer, reached 14.5 percent (against an established mandatory minimum ratio of 11.250 percent). For banks, Tier 1 capital, including the capital conservation buffer, reached 11.4 percent (versus a mandatory minimum ratio of 7.25 percent as of the first of January 2017). Common equity stood at 8.5 percent (against a mandatory minimum ratio of 4.5 percent as of the 1st of January 2015). Return on average assets and equities of the banking system amounted to 2 percent and 30.9 percent, respectively, and net interest margin 4.6 percent for FY 2016 (the latest certified financial statements). The ratio of non- performing loans and facilities to total loans and facilities reached 5.5 percent. Loans and facilities provisions/ non- performing loans and facilities registered 99.1 percent.

As regards the payment systems and information technology (IT), the CBE

has finished the preparation of the system of Small and Medium Sized Enterprises Initiative that aims to provide medium and small sized enterprises with the necessary finance for purchasing the equipment required for industrial purposes. Tests required for this system are underway for the purpose of completing the procedures needed for its actual operation. This is in addition to a number of developments and accomplishments that are tackled in detail in this Report.

III


As for the performance of EGX, noticeable increases were seen in most price indices. Its benchmark index (EGX 30) increased during the year by 93.0 percent to 13395.8 points at end of June 2017. Also, EGX 20 Capped rose by 76.7 percent to 12326.0 points. In addition, EGX 50 EWI index that encompasses the largest 50 companies in terms of liquidity and activity registered a rise of 64.8 percent to 2076.3 points at end of June 2017.

Likewise, EGX 70 and EGX 100 increased by 85.0 percent and 102.9 percent, in

order, to stand at 649.4 points and 1509.2 points at end of June 2017. The NILEX index, which reflects the activity of small and medium enterprises listed on the Nile Stock Exchange, recorded a decline of 19.2 percent to 510.1 points at end of June 2017.

As for the forex market, the decision taken by the CBE on 3 November 2016 to

adjust the foreign currency trading policy was a key step towards restoring confidence in the Egyptian economy; overcoming the shortage of foreign currency and building foreign currency reserves. This is besides supporting exports and tourism, enhancing the competitiveness of Egypt in international markets, and helping attract foreign investment which had a positive impact on the balance of payments.

At end of June 2017, the weighted average of the US dollar interbank rate

amounted to LE 18.0911 (compared with LE 8.7800 at end of June 2016), with a 51.5 percent fall in the value of the Egyptian pound in FY 2016/2017. The weighted average of the US dollar reached LE 17.7277 at end of December 2017, with an increase of 2.0 percent in the value of the Egyptian pound during July/Dec. of FY 2017/2018.

The decision of the exchange rate liberalization on Nov 3, 2016 had positively

affected the market's resources of foreign currency. Specifically, since the liberalization decision till the end of June 2017, banks' foreign currency resources reached US$ 34.0 billion (of which US$ 22.5 billion were customers' sales and US$ 11.5 billion were investment inflows). The CBE's foreign currency resources amounted to US$ 53.8 billion, and its foreign currency uses reached US$ 33.3 billion during the same period.

Net international reserves (NIR) with the CBE scaled up by US$ 13.8 billion or

78.4 percent in FY 2016/2017, to end the year at US$ 31.3 billion, covering 6.6 months of merchandise imports. Moreover, at the time of preparing this Report, NIRs surged to US$ 42.5 billion, covering 8.6 months of merchandise imports at end of February 2018.

IV


Egypt's transactions with the external world during FY 2016/2017 unfolded an overall BOP surplus of about US$ 13.7 billion (of which US$ 12.2 billion were realized in November/June 2016/2017 after the decision of the exchange rate liberalization), against an overall deficit of US$ 2.8 billion a year earlier. The capital and financial account recorded a net inflow of US$ 29.0 billion (against US$ 21.2 billion), while the current account deficit retreated by 21.5 percent to only US$ 15.6 billion (against US$ 19.8 billion).

The decline of the current account deficit resulted from the fact that: (i) the

trade deficit declined by 8.4 percent to only US$ 35.4 billion (against US$ 38.7 billion), (ii) the services surplus rose by 4.3 percent to US$ 6.8 billion (against US$ 6.5 billion), and (iii) net unrequited current transfers rose by 4.1 percent to US$ 17.5 billion (against US$ 16.8 billion), mainly due to the rise in remittances of Egyptians working abroad by 2.2 percent. The investment income balance deficit also narrowed by 1.1 percent to US$ 4.4 billion (from US$ 4.5 billion).

The capital and financial account unfolded a net inflow of US$ 29.0 billion

(against US$ 21.2 billion). This came on account of the increase in the net inflow of foreign direct investment (FDI) in Egypt, to record US$ 7.9 billion (against US$ 6.9 billion). Another factor at work was that portfolio investments in Egypt surged, recording a net inflow of US$ 16.0 billion (against a net outflow of US$ 1.3 billion).

Turning to the fiscal policy, total revenues registered LE 659.2 billion (19.0

percent of GDP), up by LE 167.7 billion or 34.1 percent, according to the actual preliminary data of the fiscal operations of the state budget (administrative system, local administration, and service authorities) for FY 2016/2017. Total expenditures also increased by LE 214.1 billion or 26.2 percent to LE 1031.9 billion (29.7 percent of GDP). Accordingly, the cash deficit posted LE 372.7 billion or 10.7 percent of GDP. By adding the net acquisition of financial assets (LE 6.8 billion) to the cash deficit, the overall deficit rises by LE 40.0 billion (relative to the previous fiscal year), to stand at LE 379.5 billion. Although the overall deficit rose as an absolute figure, its ratio to GDP fell to 10.9 percent (from 12.5 percent). Additionally, the primary deficit as a percentage of GDP declined to 1.8 percent (from 3.5 percent).

Gross domestic public debt amounted to LE 3160.9 billion at end of June 2017

(against LE 2620.7 billion at end of June 2016). Its ratio to GDP declined to 91.1 percent down from 96.7 percent. The debt balance consists of the sum of net government debt, public economic authorities' debt and that of the National Investment Bank (NIB), minus the intra-debt of public economic authorities and the government to NIB.

Government debt (domestic and external) grew by 28.9 percent during FY

2016/2017, to reach LE 3201.1 billion or 92.2 percent of GDP at end of June 2017.

V


The outstanding external debt (public and private - all maturities) denominated in US dollar rose by US$ 23.3 billion or 41.7 percent at end of June 2016, to reach US$ 79.0 billion at end of June 2017. The rise in debt stock was an outcome of the increase in the net disbursements of loans & facilities by US$ 23.6 billion; and the depreciation of most currencies of borrowing versus the US dollar by US$ 0.3 billion. External debt service amounted to US$ 7.3 billion during FY 2016/2017 (principal repayments made up US$ 6.1 billion and interest payments US$ 1.2 billion). According to external debt indicators, the ratio of external debt to GDP posted 33.6 percent (against 16.6 percent). The ratio of debt service to exports of goods and services reached 19.1 percent (against 14.6 percent). However, these ratios are still within safe limits, according to the IMF and World Bank classification.

The indicators of external debt in Egypt, relative to peer regional country groups,

showed that external debt as a percentage of GDP ranged between 18.1 percent and 61.9 percent (Egypt 33.6 percent), and the indicator of debt service/exports of goods and services ranged between 28.6 percent and 51.4 percent (Egypt 19.1 percent).

Chapter 1: Central Bank of Egypt

1/1 Monetary Policy

1/2 Reserve Money

1/3 Payment Systems and Information Technology (IT)

1/3/1 RTGS and SWIFT Local Services 1/4 Domestic Liquidity and Counterpart Assets

1/5 Supervision Sector 1/6 Management of the Foreign Exchange Market and

International Reserves

1/6/1 Foreign Exchange and Dollar Interbank Markets 1/6/2 Management of International Reserves 1/7 Domestic Public Debt and External Debt 1/7/1 Domestic Public Debt 1/7/1/1 Debt of the Government (Net) 1/7/1/2 Net Debt of Public Economic Authorities 1/7/1/3 Net Debt of NIB 1/7/1/4 Intra-debt 1/7/2 External Debt 1/8 Human Resources Development (HRD)

1/8/1 Activity of EBI 1/8/2 CBE Staff Programs

1


Chapter 1 Central Bank of Egypt

1/1- Monetary Policy

As the ultimate objective of the monetary policy is price stability, the CBE strives

to bring inflation to an appropriate and stable level conductive to building confidence, stimulating investment and achieving the targeted economic growth.

The overnight interbank interest rate is considered the operational target of the

monetary policy, whereby a framework based on the corridor system is applied, within which the ceiling is the overnight interest rate on lending from the Central Bank, and the floor is the overnight deposit interest rate at the Bank.

Hereunder are the monetary policy decisions taken in FY 2016/2017:

The MPC's decisions in its seven periodic meetings during the reporting year were consistent with the inflation developments and the MPC's inflationary pressure forecasts. To elaborate, in its first and second meetings (dated 28 July and 22 September 2016), the Committee decided to keep the overnight deposit and lending rates unchanged at 11.75 percent and 12.75 percent, respectively. The CBE's main operations (repos or deposits auctions, depending on market liquidity conditions) and the CBE's discount rate were also kept unchanged at 12.25 percent each.

Out of its keenness to shore up confidence in the Egyptian economy and achieve

monetary stability by targeting lower levels of inflation, the CBE decided on November 3, 2016 to embark on several measures to adjust the foreign currency trading policy through liberalizing the exchange rates. According to this decision, banks are at liberty to quote and trade at any exchange rate. The decision was intended to restore FX trading to formal banking channels and eliminate the parallel market. The decision came in line with a broader package of reforms that will ensure macroeconomic stability through fiscal consolidation as announced by the government. This can be achieved by completing the subsidy reform program, rationalizing government spending, reducing imports especially random imports, increasing exports, and encouraging domestic investment which is now being firmly implemented. By doing so, the government aims - through the fiscal and monetary package of reforms- to empower the Egyptian economy to face the current economic challenges, unleash its potentials, and achieve the aspired growth and employment rates in a way that is commensurate with Egypt's capabilities and utilizes the full range of its human, natural and material resources.

2 Central Bank of Egypt – Annual Report 2016/2017

In this regard, the CBE has taken the following decisions:

1. Giving banks operating in Egypt the liberty to quote and trade at any exchange rate through reactivating the interbank mechanism.

2. Raising the overnight deposit and lending rates by 300 basis points to 14.75

percent and 15.75 percent, respectively. The rate of the CBE's main operations and the discount rate were also raised by 300 bps to 15.25 percent each.

The MPC decided in its four periodic meetings held on 17 November 2016, 29

December 2016, 16 February 2017 and 30 March 2017 to keep the overnight deposit and lending rates unchanged at 14.75 percent and 15.75 percent, in order. Also, the CBE's main operations and the CBE's discount rate were also kept unchanged at 15.25 percent, each.

The CBE raised the interest rates in November 2016 (by 3 percent) and

restructured the deposits acceptance operations for absorbing short-term excess liquidity to include longer-term maturities. This in turn led to a noticeable drop in monthly inflation rates. However, this drop was not sufficient to achieve the inflation target over the medium- term, as the CBE is targeting an annual inflation rate of 13 percent (+/- 3 %) in Q4 2018. Thus, the MPC decided in its last periodic meeting of FY 2016/2017 (dated 21 May, 2017) to raise the overnight deposit and lending rates by 200 basis points, to 16.75 percent and 17.75 percent, respectively. Also, the CBE's main operations and the CBE's discount rate were raised by 200 basis points, to 17.25 percent, each.

In order to alleviate the adverse effects arising from the rise in both fuel & electricity prices and VAT, the MPC decided in its first periodic meeting of FY 2017/2018 on 6 July, 2017 (at the time of preparing this Report) to increase the overnight deposit rate, overnight lending rate and the CBE's main operation by 200 basis points to 18.75 percent, 19.75 percent and 19.25 percent, respectively. The discount rate was also raised by 200 basis points, to 19.25 percent. However, the afore-mentioned rates were kept unchanged in the following meeting dated 17 August, 2017 (while the Report at hand was under preparation).

The following are the key developments that took place during FY 2016/17:- First: Interest Rates:

The MPC's decisions during the year under review affected both the overnight interbank interest rates and the interest rates on LE loans and deposits at banks, as shown below:

3


1- Overnight Interbank Interest Rates

The MPC's decisions taken during FY 2016/2017 were reflected in the overnight

interbank interest rates. Hence, the overnight interbank interest rates were kept unchanged in Q1, raised in Q2 by 300 basis points, then kept unchanged in Q3, and raised in Q4 by 200 basis points. As the CBE has adopted a tightening monetary policy to absorb excess liquidity at the banking sector through conducting deposit acceptance operations with longer maturities, the weighted average of the overnight interbank interest rate moved close to the corridor ceiling rate, as illustrated in the following chart:

2- Interest Rates on LE Loans and Deposits

The MPC's decisions taken in the reporting year affected the interest rates in the money market as shown in the following table:

Weighted Average Interest Rate

(%) Month June 2016 June 2017

Deposits More than one month and up to three months 7.5 11.2 More than three months and up to six months 8.2 12.6 More than six months and up to one year 8.9 12.2 Loans* For one year or less 13.4 18.0

* The interest rate on corporate loans after the application of Domestic Money Monitoring System (DMMS).


Second: Open Market Operations

During FY 2016/2017, the average liquidity absorbed by the CBE via its monetary policy instruments markedly increased to LE 455.3 billion at end of June 2017 (compared with LE 155.3 billion at end of June 2016), with an increase of LE 300 billion. This was primarily driven by the higher government spending on various activities and by the spike in net foreign exchange purchases which resulted in a surge in net international reserves at the CBE following the economic reform measures in the reporting year.

In order to increase the effectiveness of liquidity management given the high

volume of excess liquidity at the banking system, some adjustments were made to the current operational structure of the monetary policy, to include longer-term deposit acceptance operations. Hence, an operational structure for operations with maturities ranging between 28, 56, 112, and 210 days was implemented. The balance of deposits averaged LE 442.4 billion or 97 percent of total liquidity absorbed by the CBE at the end of June 2017.

1/2- Reserve Money

Reserve money reached LE 577.6 billion at end of June 2017, up by LE 99.5

billion or 20.8 percent during FY 2016/2017 (against a decline of LE 7.8 billion or 1.6 percent a year earlier). The increase in reserve money in the reporting year was reflected in the increase in the currency in circulation outside the CBE by LE 83.6 billion or 22.7 percent, to reach LE 452.0 billion or 78.3 percent of reserve money at end of June 2017. Add to this the rise in banks' local currency deposits at the CBE by LE 15.9 billion or 14.5 percent, to reach LE 125.6 billion at end of June 2017.

Reserve Money and Counterpart Assets*

(LE mn) Balances at

End of June 2017

Change During the FY + (-) 2015/2016 2016/2017

Value Value

A- Reserve Money 577582 (7800) 99506

- Currency in circulation outside CBE 452035 54991 83576 - Banks' local currency deposits at CBE 125547 (62791) 15930

B- Counterpart Assets 577582 (7800) 99506 Net Foreign Assets 3690 (70141) 48553 Foreign Assets 551514 1845 401571 Foreign Liabilities 547824 71986 353018 Net Domestic Assets 573892 62341 50953 Net Claims on Government 708637 95517 89227 Net Claims on Banks 157141 85955 97520 Net Balancing Items -291886 (119131) (135794) * Derived from the CBE’s balance sheet.

5


The pickup of the currency in circulation outside the CBE (the first component of reserve money) was a reflection of the rise in issued banknote by LE 83.7 billion or 22.7 percent, to stand at LE 453.1 billion at end of June 2017.

Components of the note issue cover ran as follows: foreign currencies made up

LE 406.2 billion worth or 89.6 percent at the end of June 2017 and gold LE 46.9 billion worth or 10.4 percent.

Banknote Issue* (LE mn)

At End of June Balance of Banknote Issue Change during the Year

Value %

2013 264505 56681 27.3

2014 290283 25778 9.7

2015 315313 25030 8.6

2016 369757 54444 17.3

2017 453529 83772 22.7

* Including subsidiary coins issued by the Ministry of Finance.

The breakdown of the currency in circulation outside the CBE showed a

continued rise in the relative importance of the LE 200 note, reaching 55.1 percent at end of June 2017 (against 52.6 percent at end of June 2016). Meanwhile, other denominations declined or remained stable.

Currency in Circulation By Denomination*

(LE mn)

Denominations June 2016 June 2017 Change During FY + (-)

Value Relative

Importance Value Relative

Importance 2015/2016 2016/2017

Total 368459 100.0 452035 100.0 17.5 22.7

Banknote in Circulation

368023 99.9 451587 99.9 17.6 22.7

PT 25 166 0.1 170 0.1 5.1 2.4

PT 50 364 0.1 406 0.1 3.4 11.5

LE 1 1027 0.3 1233 0.3 6.6 20.1

LE 5 2392 0.6 3048 0.6 32.7 27.4

LE 10 3018 0.8 3742 0.8 (11.5) 24.0

LE 20 6003 1.6 6670 1.5 (9.5) 11.1

LE 50 29004 7.9 28316 6.3 (5.2) (2.4)

LE 100 132277 35.9 159129 35.2 16.0 20.3

LE 200 193772 52.6 248873 55.0 24.9 28.4

Subsidiary Coins 436 0.1 448 0.1 1.9 2.8

* Representing the difference between banknote issue and cash at the CBE.


Banks’ local currency deposits at the CBE (the second component of reserve money) increased by LE 15.9 billion or 14.5 percent during the year (against a decrease of LE 62.8 billion or 36.4 percent in the year of comparison), to stand at LE 125.6 billion at end of June 2017.

The rise in reserve money in the reporting year was attributed to the increase in

both net domestic assets by LE 50.9 billion, and in net foreign assets by LE 48.6 billion worth. This can be seen as follows:

1- Net Domestic Assets

Net domestic assets surged by LE 50.9 billion during FY 2016/2017 (against LE

62.3 billion), to stand at LE 573.9 billion at end of June 2017. The surge was a result of the following developments:

Net Claims on the Government

The CBE’s net claims on the government augmented by LE 89.2 billion or 14.4

percent (against LE 95.5 billion or 18.2 percent a year earlier), to register LE 708.6 billion at end of June 2017. Such a rise was a result of the higher claims on the government by LE 115.1 billion, and the higher government deposits at the CBE by LE 25.9 billion.

Net Claims on Banks

The CBE’s net claims on banks increased by LE 97.5 billion, as a result of the

rise in its claims thereon by LE 166.4 billion, and the pickup in banks' foreign currency deposits at the CBE by LE 68.9 billion worth.

Net Balancing Items

The net balancing items had a contractionary effect on reserve money, as their

negative balance increased by LE 135.8 billion, due partly to the rise in the balance of deposits accepted at the CBE under the open market operations (by LE 317.9 billion), and partly to the increase in other assets and liabilities (net) by LE 182.1 billion.

2- Net Foreign Assets

Net foreign assets at the CBE picked up by LE 48.6 billion worth (or by LE 21.2

billion worth after excluding the effects of exchange rate liberalization on the 3rd of November 2016), against a retreat of LE 70.1 billion in the corresponding period, bringing their balance to LE 3.7 billion worth. The increase was a combined result of the rise in both foreign assets at the CBE by LE 401.6 billion worth, to reach LE 551.5 billion worth; and foreign liabilities at the CBE by LE 353.0 billion worth, to register LE 547.8 billion worth at end of June 2017.

7


1/3 - Payment Systems and Information Technology (IT)

The payment systems and information technology sector witnessed a number of achievements during FY 2016/2017, the most important of which are the following:

The establishment of a permanent Disaster Recovery (DR) site for the CBE, to be

functional in emergencies as a substitute for the main Information Center in El-Gomhoreya Building. This is intended to guarantee the continuity of the service. It is scheduled to be completed in Q2 of FY 2017/2018.

As four major banks; namely the National Bank of Egypt, Banque Misr, Banque

du Caire and Alex Bank, along with their branches in governorates, are entrusted, under an agreement with the CBE, with exercising government finance activities (e.g., payment of cheques drawn on the CBE - receipts on behalf of the CBE), signatures of governmental authorities' representatives, as well as other authorized signatories, were uploaded on the electronic systems of these banks. In Q1 of FY 2017/2018, the system was run using the new mechanism, while the old one was disabled.

The CBE joined the Regional Payment and Settlement System (REPSS) run by

the COMESA Clearing House. This system aims at executing transactions between African commercial banks of the COMESA member states. The REPSS system is supervised by the COMESA Clearing House. It aims at enhancing and promoting intra-trade between COMESA countries, and facilitating money transfer operations among member states. Moreover, the CBE currently works on developing the internal systems so as to enhance and develop the electronic linking system among the Egyptian commercial banks within the framework of launching the next phase that reduces the time period for implementing REPSS payments.

The CBE is working on expanding financial inclusion by enhancing access to

simple banking services. An example of these services is the mobile wallet, whose users exceeded five and half million persons up till now. The CBE aims at widening access to this service for all society segments, especially the small-value transactions. At present, some final amendments to the rules regulating this service are being made.

Progress has been made in establishing a system of central securities depository

for government-issued securities (CSD), a collateral management system (CMS), an auction system, and an electronic trading platform for government securities, in cooperation with the European Bank for Reconstruction and Development and the African Development Bank. The project is expected to be finished by the end of 2017.

8


The CBE is upgrading the current version of RTGS in Egyptian pound. Related softwares are being modified and upgraded, as a step towards the actual implementation of the project.

The SWIFT software will be changed from Turbo to Alliance system. Proposals

of specialized companies in this regard are currently examined.

The CBE has tightened control over import operations through automating Form 4, for commodity imports, and linking it with both the Customs Authority and banks via an electronic system that is consistent with the CBE’s information security standards. The electronic version of the Form shall be available at the Customs Authority. The said Authority will enter the actual assessment of any released consignment as well as the commodity classification of its items.

The CBE has completed the preparation of the system of the SMEs financing

initiative, which aims at funding new machinery and equipment for industrial purposes. The testing procedures are completed before the actual operation.

1/3/1- RTGS and SWIFT Local Services

Local bank transfers in Egyptian pound under the RTGS showed an increase in the number of executed messages to 1197.6 thousand in FY 2016/2017 (from 1074.5 thousand a year earlier). Their value also increased to LE 33349 billion (from LE 29709 billion). Notably, such transactions included transfers of banks and clients and transactions of treasury bills, Misr for Central Clearing, and the National Debit Switch, in addition to corridor operations and deposits for monetary policy purposes.

RTGS and SWIFT Local Services

(In Local Currency)

FY Number of Messages

(Unit) Value of Transfers

(LE bn)

Change during the Year + (-)

Number Value

2013/2014 1034549 16421 (195648) 4127

2014/2015 1021058 22587 (13491) 6166

2015/2016 1074548 29709 53490 7122

2016/2017 1197635 33349 123087 3640

According to the statistics of the CBE Automated Clearing House that applies the

RTGS system, the number of exchanged papers decreased to 12449 thousand (from 13500 thousand). Meanwhile, their value increased to LE 1249 billion (from LE 1047 billion). As a result, the average value per paper moved up to LE 100.3 thousand (from LE 77.6 thousand).

9


CBE Automated Clearing House Activity

FY Number of Papers

(Thousand)

Value of Papers

(LE bn)

Change Rate + (-)

Number Value

2013/2014 12886 789 (2.9) 8.4

2014/2015 13439 966 4.3 22.4

2015/2016 13500 1047 0.5 8.4

2016/2017 12449 1249 (7.8) 19.2

Transactions executed in foreign currencies under the Fin-Copy system, via

SWIFT, revealed an increase in their number and a decline in their value. Specifically, their number amounted to 8.4 thousand, at a value of US$ 6.9 billion, against 3.4 thousand, at a value of US$ 9.3 billion a year earlier.

SWIFT Local Services (in US Dollar)

FY Number of Messages

(Unit) Value of Transfers

(US$ mn) Change during the Year + (-)

Number Value 2013/2014 4842 8468 (5043) (26055)

2014/2015 5482 7597 640 (871)

2015/2016 3399 9257 (2083) 1660

2016/2017 8367 6916 4968 (2341)

10


1/4- Domestic Liquidity and Counterpart Assets

In FY 2016/2017, domestic liquidity grew by LE 823.7 billion or 39.3 percent (or by LE 470.3 billion or 22.5 percent excluding the effect of the exchange rate liberalization on the 3rd of November 2016), against LE 329.0 billion or 18.6 percent a year earlier. This brought total domestic liquidity to LE 2918.2 billion (down to LE 2564.8 billion when excluding the effect of the exchange rate liberalization) representing 84.1 percent of the GDP for FY 2016/2017. Such a rise was a dual effect of the increase in both net domestic assets and net foreign assets. The former made a positive contribution of 32.2 percentage points to domestic liquidity growth, and the latter made a positive contribution of 7.1 points.

The pickup in domestic liquidity was reflected in the growth in its two components, i.e., money supply and quasi-money. Money supply (currency in circulation outside the banking system and local currency demand deposits) scaled up by LE 134.5 billion or 23.5 percent (against LE 73.9 billion or 14.8 percent in the year of comparison), reaching LE 707.4 billion (24.2 percent of total domestic liquidity) at end of June 2017. The rise in money supply was attributable to the rise in both currency in circulation outside the banking system and local currency demand deposits. The former picked up by LE 72.2 billion or 20.8 percent (against LE 54.2 billion and 18.5 percent), scoring LE 419.0 billion at end of June 2017.

In parallel, local currency demand deposits increased by LE 62.3 billion or 27.6

percent during the reporting year (against LE 19.7 billion or 9.6 percent in the previous FY), reaching LE 288.4 billion at the end of June 2017. This rise reflected mainly the increase in the deposits of the household sector by LE 36.1 billion, of the private business sector by LE 23.0 billion, and of the public business sector by LE 3.5 billion.

17.3 20.9

26.532.2

-0.3 -4.5-7.9

7.1

17.016.4

18.6

39.3

-10-505

10152025303540

2013/2014 2014/2015 2015/2016 2016/2017

(%) Domestic Liquidity Growth by Components During FY

Net Domestic Assets Net Foreign Assets Domestic Liquidity Growth Rate

11


Quasi-money (time and saving deposits in local currency plus demand and time and saving deposits in foreign currencies) augmented by LE 689.2 billion or 45.3 percent in the reporting year (against LE 255.1 billion or 20.1 percent a year earlier), posting LE 2210.8 billion or 75.8 percent of total domestic liquidity at end of June 2017. The rise reflected the growth in both LE time and saving deposits and foreign currency deposits.

LE time and saving deposits surged by LE 318.7 billion or 26.6 percent (against

LE 194.3 billion and 19.4 percent), to LE 1516.5 billion or 68.6 percent of total quasi-money at end of June 2017. The increase resulted from the surge in the deposits of the household sector by LE 323.3 billion. However, the rise was curbed by the retreat in those of the private business sector by LE 4.6 billion.

Foreign currency deposits (demand and time & saving) went up by LE 370.5

billion worth or 114.4 percent (or by LE 17.1 billion worth or 5.3 percent when excluding the effects of change in exchange rate on the 3rd of November 2016), against LE 60.8 billion worth or 23.1 percent, posting LE 694.3 billion worth and constituting 31.4 percent of total quasi-money at end of June 2017. All sectors contributed to the said rise: the deposits of the household sector grew by LE 256.6 billion worth, of the private business sector by LE 93.5 billion worth, and of the public business sector by LE 20.4 billion worth.

Against these developments, the ratio of foreign currency deposits/total deposits

(dollarization rate) increased to 27.8 percent at end of June 2017 (or to 15.9 percent when excluding the effect of exchange rate liberalization on the 3rd of November), against 18.5 percent at end of June 2016.

Concerning the counterpart assets of domestic liquidity, net domestic assets

recorded a rise of LE 675.2 billion or 30.9 percent in the reporting year, against LE 467.9 billion or 27.3 percent, to stand at LE 2857.1 billion at end of June 2017.

Quasi-money

75.8%

Demand deposits in local

currency

9.9%

Currency in circulation outside the

banking system 14.3%

Money supply24.2%

Domestic Liquidity Components End of June 2017

12


The rise in net domestic assets reflected the pickup in domestic credit extended by banks during the year by LE 651.1 billion or 26.5 percent (against LE 481.9 billion and 24.4 percent), to LE 3111.3 billion at end of June 2017. Net balancing items had an expansionary effect on domestic liquidity of LE 24.1 billion.

Change in Domestic Credit

(LE mn)

During FY

2015/2016 2016/2017

Value Growth

Rate %

Value Growth

Rate

%

- Net claims on the government and public economic authorities 363483 28.1 324731 19.6

- Claims on public business sector* 29855 47.2 55642 59.8 - Claims on private business sector 55982 12.5 240314 47.7 - Claims on household sector 32584 18.6 30468 14.7

Total Change 481904 24.4 651155 26.5 * Including public companies that are subject or not to Law No. 203 for the year 1991.

The government received about more than half of the increase in domestic credit,

as net credit to the government surged by LE 324.7 billion or 19.6 percent, to register LE 1979.7 billion or 63.6 percent of total credit at end of June 2017. Such an increase reflected the rise in banks' holdings of government securities by LE 540.5 billion. However such an increase was mitigated by the increase in government deposits by LE 188.2 billion, on the one hand, and the retreat in loans to the government by LE 27.6 billion.

Credit to the private business sector stepped up by LE 240.3 billion or 47.7

percent (against LE 56.0 billion and 12.5 percent), to LE 744.6 billion or 23.9 percent of total credit at end of June 2017. Likewise, credit to the public business sector scaled up by LE 55.6 billion or 59.8 percent (against LE 29.8 billion and 47.2 percent), to post LE 148.7 billion. Credit to the household sector climbed by LE 30.5 billion or 14.7 percent (against LE 32.6 billion and 18.6 percent), to LE 238.3 billion or 7.7 percent of total domestic credit at the end of June 2017.

Net balancing items (the sum of capital accounts, interbank net credit and debit

positions and those between banks and the CBE, and net unclassified assets and liabilities) had an expansionary effect of about LE 24.1 billion on domestic liquidity. This was due to the rise in net unclassified assets and liabilities by LE 149.1 billion and the LE 65.7 billion increase in the interbank net debit and credit positions and those between banks and the CBE. Add to this the increase of capital accounts by LE 190.7 billion.

13


Net foreign assets at the banking system augmented by LE 148.5 billion worth in the reporting year (or by LE 83.4 billion worth when excluding the exchange rate liberalization effect on the 3rd of November 2016), compared to a decline of LE 138.9 billion worth a year earlier, to stand at LE 61.1 billion worth at the end of June 2017. The increase came on the back of the rise in net foreign assets at banks and the CBE as follows:

The increase in net foreign assets at banks by LE 99.9 billion worth (or LE

62.2 billion worth when excluding the exchange rate liberalization effect on the 3rd of November 2016), to post LE 57.4 billion worth at the end of June 2017 (against negative LE 42.5 billion worth at the end of June 2016).

The increase in net foreign assets at the CBE by LE 48.6 billion worth, to stand at LE 3.7 billion worth at the end of June 2017 (against negative LE 44.9 billion worth at the end of June 2016).

0

200

400

600

800

1000

2013 2014 2015 2016 2017

(LE bn)

Foreign Assets & Liabilities at the Banking System at End of June

Foreign Assets Foreign Liabilities


1/5- Supervision Sector

The CBE conducts supervision over banks operating in Egypt to ensure their sound financial positions and evaluate their performance from the perspective of risk based supervision. In addition, it ascertains banks’ compliance with the CBE established regulatory standards, including the minimum reserve requirement and liquidity ratios, the maximum limits of a bank’s concentration of investments with a single customer, along with his related parties, and investments abroad, as well as the asset-liability matching in terms of maturity and currency. This is in addition to a number of qualitative standards that ensure – alongside the above – the soundness of banks’ performance and the safety of depositors’ funds. Among these standards are governance rules; information systems efficiency rules; and ''Fit and proper'' criteria for officials and managers of key sectors at banks.

The CBE has prepared and implemented the Banking Sector Reform Program, through which banks have been restructured, their capital has been raised and their risk management has been strengthened. It is worth mentioning that the said Program was fruitful mainly as regards Basel II implementation as the CBE's BoD has approved in its session dated December 18, 2012 the regulations of the minimum capital adequacy requirement.

In line with Basel Committee's proposal to introduce a ''leverage ratio'' to act as a supplementary measure to the risk-based capital adequacy requirements (in line with the timeline for applying Basel III accords), the CBE's BoD approved in its session held on 7 July 2015 the leverage ratio regulations. Under these regulations, banks are required to meet the Basel III leverage ratio; first as an indicative ratio starting from the end of September 2015 till 2017, then as a mandatory ratio as of 2018.

To enhance the link between a bank’s risk profile and its internal risk management and capital adequacy assessment, the CBE started applying the second pillar of Basel II requirements based on two main pivots, as follows: a- In its meeting held on the 2nd of March 2016, the CBE's BoD approved the

regulations of the internal capital adequacy assessment process (ICAAP), required to be conducted by banks in accordance with each bank's risk profile, to address all types of risks (including the risks that were not tackled in the first pillar).

b- The CBE has taken several measures to apply the supervisory review and

evaluation process (SREP). The key purpose of SREP is to ensure that banks maintain adequate capital to ensure a sound coverage of their risks, as well as to encourage them to develop and use appropriate risk-management techniques to monitor, manage, measure and address all the risks they are vulnerable to.

15


Out of its keenness to apply the international best practices, especially Basel III requirements, the CBE's BoD approved in its two sessions dated 7 April and 13 July 2016 the implementation of the capital conservation buffer and the issuance of the supervisory regulations pertaining to liquidity risk management, respectively, as follows:

1- Capital Conservation Buffer

In order to ensure the coverage of losses that may arise during times of stress or financial crisis and to conserve the capital base of Egyptian banks, banks operating in Egypt have to comply with these regulations as of the first of January for banks with fiscal year ending in December and as of the first of July 2016 for banks with fiscal year ending in June, in order to meet the required total ratio of 2.5 percent in January/July 2019.

1- Supervisory Regulations of Liquidity Risk Management

First: Liquidity Coverage Ratio (LCR)

Banks shall maintain a minimum ratio for each of local and foreign currencies, according to the following schedule:

(%) Year 2016 2017 2018 2019 Min. Ratio 70 80 90 100

Second: Net Stable Funding Ratio (NSFR)

Banks must comply with this ratio within a maximum period of three months starting from July 2016, as follows:

Maintain a total minimum ratio of 100%. Maintain a minimum ratio of 100% for each of local and foreign currencies.

Under the CBE's ongoing follow-up of the key tasks of banks' executive

managers according to Article (43) of Law No. 88 of 2003 of the Central Bank, the Banking Sector and Money, instructions were issued by the CBE on 4 August 2016, requiring banks to submit to the Supervision Sector a list of the names of the staff in charge of key tasks at banks, attached with an organizational chart stating each incumbent's position, together with his reporting line.

In order to boost the supervisory role and establish the instructions of banks' governance, the CBE as of the 1st of February 2017 issued a number of regulations, requiring banks to submit a copy of the minutes of the BoD's meetings and the BoD's committees within a month from the date of meeting.


In the light of the instructions which stated that in the event of running for the post of Chairman or Vice Chairman of any bank, or executive board members, an interview shall be conducted before holding office, with Deputy Governor, or Sub- Governor in charge of the CBE's Supervision Sector. Thus, the CBE issued instructions on 19 February, 2017 stating that this procedure shall be applied to non- executive members in case of being a candidate for the first time or seeking re-nomination. In addition, the CBE intends to hold an annual meeting with non- executive board members provided that this meeting shall be determined in a timely manner so as to discuss and follow up the efficiency and effectiveness of the governance rules applied at banks.

During the period under review, (48) BoD members and 29 executive managers were added to the register of banks, pursuant to Article (43) of Law No. 88 of 2003 of the Central Bank, the Banking Sector and Money, and in compliance with the applicable Fit and Proper criteria.

In light of Article 32/3 of the aforesaid Law which states that the Governor of the CBE, following the consent of the Board of Directors, shall approve the statute of the bank, and any modification thereto, certain articles of the statute of (12) banks were modified during the year in question.

Furthermore, (116) new branches [including (63) ordinary branches, (1) Islamic

branch, (47) mini branches, (3) mini- Islamic branches, (1) agency, and (1) seasonal branch] of (26) banks were added to the register of banks. This came in accordance with the regulations set by the CBE that give due regard to the soundness of financial positions, internal controls, and the efficiency of information systems of applicant banks to open new branches, together with their capital adequacy to ensure that they can better face the risks arising from the expansion in their activities.

In light of the regulations established for electronic payment services, (15) banks were licensed to offer (32) e-banking services.

Concerning on-site supervision, the Supervision Sector at the CBE continued

assuming its role in exercising supervision over banks, guided by the set plan. Specifically, the following points were observed:

Making sure that the inspected bank complies with the instructions stated in the

Central Bank, the Banking Sector and Money Law and its Executive Regulations as well as the instructions issued by the CBE.

Identifying the different kinds of risks to which the inspected bank is vulnerable and performing quantitative and qualitative risk analysis to assess the risk level, then take the appropriate measures to minimize them and set corrective plans for

17


their avoidance; and making sure that the inspected bank secures enough provisions against non-performing loans, in order to guarantee the safety of depositors' and shareholders' funds.

Ensuring the soundness of banks' financial positions and verifying that the

financial data therein are identical to those in banks' records.

Following up - on a regular basis - the economic, financial and monetary developments, in accordance with the decisions taken regarding the foreign currency trading, especially in light of the CBE's Decision dated 3/11/2016 concerning the exchange rate liberalization.

1/6- Management of the Foreign Exchange Market and International Reserves 1/6/1- Foreign Exchange and Dollar Interbank Markets

Performance and Development of the Foreign Exchange Market

Out of its keenness to shore up confidence in the Egyptian economy and achieve monetary stability by targeting lower levels of inflation, the CBE decided on November 3, 2016 to embark on several measures to adjust the foreign currency trading policy through liberalizing the exchange rates. Pursuant to this decision, banks are at liberty to quote and trade at any exchange rate, with the aim of restoring FX trading to formal banking channels and eliminating the parallel market. This came in line with the economic reform program that would empower the Egyptian economy to face the longstanding challenges, unleash its potentials, and achieve the aspired growth and employment rates in a way that is commensurate with Egypt's capabilities and utilizes the full range of its human, natural, and material resources.

Egypt's decision to liberalize the exchange rate on November 3, 2016 has

positively affected foreign currency resources. Specifically, banks' resources of foreign currency as of the stated decision till the end of June 2017, amounted to US$ 34.0 billion (of which customers' sales recorded US$ 22.5 billion, while investment inflows registered US$ 11.5 billion).

The CBE's resources of foreign currency since the aforementioned decision till

the end of June 2017 reached US$ 53.8 billion, while its uses of foreign currency stood at US$ 33.3 billion.

The weighted average of the US dollar interbank rate posted LE 18.0911 at end of June 2017 (against LE 8.7800 at end of June 2016), with a 51.5 percent drop in the value of the Egyptian pound during FY 2016/2017. At end of December 2017 (during the preparation of the Report at hand), the weighted average of the US dollar reached LE 17.7277, with a rise of 2.0 percent in the value of the Egyptian pound during the period July/December of FY 2017/2018.


1/6/2- Management of International Reserves

Net international reserves (NIR) at the CBE increased by US$ 13.8 billion or 78.4 percent in FY 2016/2017, to end the year at US$ 31.3 billion (covering 6.6 months of merchandise imports). At the time of preparing this Report, NIR increased, to stand at US$ 42.5 billion at end of February 2018 (covering 8.6 months of merchandise imports).

1/7- Domestic Public Debt and External Debt 1/7/1- Domestic Public Debt

At end of June 2017, domestic public debt amounted to LE 3160.9 billion

(against LE 2620.7 billion at end of June 2016), scoring an increase of LE 540.2 billion or 20.6 percent during FY 2016/2017. Despite the rise of domestic public debt as an absolute number, the public debt / GDP ratio dwindled to 91.1 percent at end of June 2017 (versus 96.7 percent at end of June 2016).

* Domestic public debt includes net debt of the government, net debt of public economic authorities, and that of the

National Investment Bank (NIB), minus the intra-debt of both public economic authorities and the government to the NIB.

012345678910

0

10

20

30

40

2010 2011 2012 2013 2014 2015 2016 2017

Net International Reserves & Months of Merchandise Importsat End of June

Net International Reserves NIR in months of merchandise imports

(Months of Imports)(US$ bn)

2685.9

222.3

336.9

-84.2

3160.9

-500 0 500 1000 1500 2000 2500 3000 3500

Net Domestic Debt of Government

Net Debt of Public Economic Authorities

NIB Debt (Net)

Intra-Debt

Gross Domestic Debt

Gross Domestic Debt at End of June 2017 (LE bn)

19


1/7/1/1-Debt of the Government (Net)

Net government domestic debt expanded by LE 400.3 billion or 17.5 percent in

FY 2016/2017 to LE 2685.9 billion at end of June 2017 (compared to LE 2285.6 billion at end of June 2016). Despite the increase in the net government domestic debt as an absolute figure, its ratio to GDP retreated to 77.4 percent at end of June 2017 (from 84.4 percent at end of June 2016).This was driven by the rise of LE 734.0 billion in the balances of treasury bonds and bills and the contraction of LE 332.8 billion in the net balances of the government at the banking system (due to the decline in government loans by LE 190.1 billion and the increase in government deposits by LE 142.7 billion). Add to this, the decline in the value of the issued Masri Dollar Certificates by LE 0.9 billion worth.

Domestic Debt of the Government (Net) (LE bn)

Balances at End of June 2016 June 2017 Change

+ (-) 2016/2017

Value % Value %

Domestic Government Debt (Net) 2285.6 100.0 2685.9 100.0 400.3

- Balances of Bonds & Bills 2290.5 100.2 3024.5 112.6 734.0

Bonds, of which, 1474.5 64.5 1838.8 68.5 364.3

Tradable on exchanges 753.9 33.0 729.3 27.2 (24.6)

Treasury bills 816.0 35.7 1185.7 44.1 369.7

- Facilities from SIFs 0.3 0.0 0.3 0.0 0.0

- Masri Dollar Certificates 1.1 0.1 0.2 0.0 (0.9)

- Net Balances at the Banking System -6.3 -0.3 -339.1 -12.6 (332.8)

Credit facilities 290.8 12.7 100.7 3.7 (190.1)

Deposits (-) 297.1 13.0 439.8 16.3 142.7

Net Domestic Government Debt/GDP

(%) 84.4 77.4 Source: Table 3/1 in the Statistical Annex. Ratios are calculated in terms of LE million.

The increase of LE 734.0 billion in the balance of government bonds and bills

was distributed as follows: - 49.6 percent (or LE 364.3 billion worth) was in government bonds (of which LE

251.5 billion were treasury bonds at the CBE mostly to cover the cash deficit in government accounts, LE 72.1 billion worth were international euro bonds issued for the CBE in November 2016, and LE 41.3 billion worth were US dollar bonds issued for commercial banks).

- 50.4 percent (or LE 369.7 billion worth) was in treasury bills (of which LE 201.3

billion were issued in Egyptian pound, LE 154.6 billion worth in US dollar, and LE 13.8 billion worth in euro).


1/7/1/2- Net Debt of Public Economic Authorities

During FY 2016/2017, net debt of public economic authorities hiked by LE 118.6 billion to LE 222.3 billion at end of June 2017. The rise was traceable to the pickup in their net borrowing from the banking system by LE 118.5 billion (owing to the rise in their claims on the banking system by LE 162.5 billion and in their deposits therewith by LE 44.0 billion), as well as the rise in their borrowing from the NIB by LE 0.1 billion.

1/7/1/3- Net Debt of NIB

Net debt of NIB (including intra-debt) mounted to some LE 336.9 billion at end of June 2017, up by LE 27.3 billion in the reporting year. That was driven by the increase in total resources invested at the NIB by LE 28.8 billion to LE 344.1 billion, on the one hand, and the rise in its deposits at the banking system by LE 1.5 billion, on the other.

1/7/1/4- Intra-Debt Intra-debt of public economic authorities and the government to the NIB reached

some LE 84.2 billion at end of June 2017 (against LE 78.2 billion at end of June 2016), recording an increase of LE 6.0 billion in FY 2016/2017. NIB's investments in government securities (bills and bonds) recorded LE 32.6 billion, up by LE 5.9 billion in FY 2016/2017, while the loans extended by the NIB to these authorities registered LE 51.6 billion, up by LE 0.1 billion. Most of the increase was due to the rise in foreign currency claims due to the rise in the exchange rate of these

currencies versus the Egyptian pound after the liberalization of the exchange rate in Nov. 2016.

Social Insurance Funds16.3%

Proceeds of Investment

Certif icates & Accumulated

Interest47.5%

Post Off ice Saving Account35.5%

Dollar Development

Bonds &Others0.7%

Resources of the NIB at End of June 2017

Loans to Holding Companies & Aff iliate Units, Concessional

Lending & Others73.4%

Loans to Economic Authorities

15.0%

Investment in Treasury Bills &

Bonds9.5%

Deposits w ith the Banking System

2.1%

Uses of the NIB at End of June 2017

76.6 84.4 77.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

-400

100

600

1100

1600

2100

2600

3100

June 2015 June 2016 June 2017

Net Domestic Debt of the Government

Net Government Balances with the Banking System Bonds & other Credit Facilities

Treasury Bills Ratio of Government Debt /GDP

%LE bn

Net

Dom

estic Deb

t of th

eGove

rnm

ent / GDP

21


1/7/2 – External Debt

Total external debt (all maturities) increased by US$ 23.3 billion or 41.7 percent, reaching US$ 79.0 billion at end of June 2017 (compared to the end of June 2016). This came due to the rise in net disbursements of loans, facilities and deposits by US$ 23.6 billion as well as the depreciation of most currencies of borrowing versus the US dollar by US$ 0.3 billion.

Below is a detailed review of the main developments of external debt structure, in

addition to its service and indicators: First- External Debt Structure

The data of external debt by original maturity indicated that medium- and long-term debts (guaranteed and non-guaranteed) registered US$ 66.7 billion, or 84.5 percent of total external debt at end of June 2017. In figures, long-term debt made up US$ 48.7 billion, while medium-term debt constituted US$ 18.0 billion (mostly debts owed to international and regional organizations, and to Arab countries). In the meantime, short-term debt stood at US$ 12.3 billion or 15.5 percent of total external debt.

1- Medium- and Long-term Debt

The structure of medium- and long term debt at end of June 2017 indicates the

following :-

- Rescheduled bilateral loans registered US$ 4.3 billion. - Other bilateral loans reached US$ 6.6 billion. - Buyers' & suppliers' credit stood at US$ 6.5 billion. - Debt of international and regional organizations posted US$ 21.7 billion. - The balance of Egyptian bonds and notes floated abroad (held by non-residents)

reached US$ 9.0 billion. It consisted of the following:

Sovereign bonds issued abroad in April 2010, at a value of US$ 988.6 million, and falling due over two tranches by 2020 and 2040.

Global Medium-Term Notes (GMTN) issued in 2015, at a value of US$ 1.2 billion, and falling due in 2025.

Global Medium-Term Notes Programme issued in 2017, at a value of US$ 6.8 billion and falling due in 2022, 2027, and 2047.

Private

sector (non guaranteed)

0.2%

Rescheduled

bilateral debt 5.4%

Suppliers' &

buyers' credits

8.2%

Other

bilateral debt 8.3%

Egyptian

bonds and notes

11.4%

Short term debt

15.5%

Long term deposits

23.5%

International & regional

organizations

27.5%

External Debt StructureEnd of June 2017

22


- Long-term deposits from Arab countries reached US$ 18.5 billion. - Non-guaranteed debt of the private sector reached US$ 155.3 million.

2- Short-term External Debt

Short-term external debt increased by

US$ 5.2 billion at end of June 2017 compared to the end of June 2016, to stand at US$ 12.3 billion or 15.5 percent of total external debt. This was ascribed to the pickup in short-term deposits of non-residents by US$ 2.3 billion, to US$ 3.8 billion (including Chinese currency swap deal of US$ 2.6 billion) and short-term trade loans and facilities by US$ 2.9 billion, to US$ 8.5 billion.

3- External Debt by Debtor

External debt owed by the central and local government accelerated by US$ 10.4 billion to US$ 34.9 billion at end of June 2017, representing 44.1 percent of total external debt: the monetary authority by US$ 8.2 billion to US$ 30.3 billion: and other sectors and banks by US$ 4.6 billion and US$ 0.1 billion, to US$ 9.7 billion and US$ 4.1 billion, respectively.

4- External Debt by Currency

The breakdown of currency composition of external debt showed that the US dollar accounted for the bulk of external debt, with a relative importance of 69.9 percent, due to the outstanding obligations in US dollar to creditors other than the USA. The euro came next with a share of 12.6 percent, followed by the SDRs (7.0 percent), then the Chinese yuan (3.4 percent), the Kuwaiti dinar (3.0 percent) and the Japanese yen (2.9 percent).

0.02.04.06.08.0

10.012.014.0


(US$ bn)Short-term External Debt

End of

Deposits Other short-term facilities

%0%20%40%60%80

%100


External Debt by Debtor

End of

Central & Local Government Monetary Authority Banks Other Sectors

US dollar 69.9%

Euro12.6%

SDRs7.0%

Chinese yuan3.4%

Kuwaiti dinar3.0%

Japanese yen2.9%

Other currencies

1.2%

External Debt structure by CurrenciesEnd of June 2017

23


5- External Debt by Creditor

The breakdown of external debt by creditor revealed that US$ 22.3 billion (or 28.2 percent of total external debt) were owed to Arab countries, mainly Saudi Arabia (10.4 percent), UAE (9.6 percent), Kuwait (6.3 percent), and Libya (1.3 percent). Debt to international and regional organizations registered US$ 21.7 billion, Egyptian bonds and notes US$ 9.0 billion and debt to China US$ 4.7 billion. In the meantime, US$ 19.6 billion were owed to main six countries; namely Germany (8.0 percent), China (6.0 percent), the UK (4.3 percent), Japan (2.8 percent), the USA (2.0 percent), and France (1.7 percent).

Second-External Debt Service

External debt service reached US$ 7.3 billion in FY 2016/2017. Of this amount, principal repayments made up US$ 6.1 billion and interest payments (including interests on deposits and bonds during the reporting year) recorded US$ 1.2 billion.

Third- External Debt Indicators

Despite the higher level of external debt during the reporting year, most of its indicators are within the thresholds under the Joint World Bank-IMF Debt Sustainability Framework for Low-Income Countries, as illustrated below: - The ratio of external debt to GDP

reached 33.6 percent compared to 16.6 percent at end of June 2016.

- The ratio of short-term external debt to total external debt reached 15.5 percent against 12.6 percent.

- The ratio of external debt service to exports of goods and services recorded 19.1 percent against 14.6 percent.

- The ratio of short-term external debt to NIRs registered 39.2 percent against 40.0 percent (due to higher international reserves).

This was due to the decision of Egyptian pound liberalization on November 3, 2016.

France

1.7%United

Kingdom4.3%

USA

2.0%

Japan2.8%

China

6.0%

Germany8.0%Other

countries

8.1%

Egyptian

bonds and notes

11.4%

International

& regional organizations

27.5%

Arab

countries28.2%

External Debt by CreditorEnd of June 2017

020406080

2015 2016 2017

%External Debt Indicators

End of June

Government External Debt / External Debt

External Debt /GDP

Short-term Debt / Net International Reserves

Short-term Debt / Total External Debt


In terms of international comparison, the indicators of external debt in Egypt relative to peer regional country groups showed that Egypt’s debt as a percentage of GDP (33.6 percent) came among the global levels that ranged between 18.1 percent and 61.9 percent. Moreover, by recording 19.1 percent, the indicator of debt service/exports of goods and services also came among the global levels that ranged between 28.6 percent and 51.4 percent.

6-New Commitments on Loans and Facilities

During FY 2016/2017, new commitments on loans and facilities reached US$ 3.1

billion, compared with US$ 3.9 billion a year earlier. Specifically, loans from international and regional organizations registered US$ 2.4 billion (mainly with the International Bank for Reconstruction and Development (IBRD) and the African Development Bank (AfDB). Also, bilateral loans accounted for US$ 0.7 billion, mainly with France, Italy, Germany, and Japan.

1/8- Human Resources Development (HRD)

The Central Bank of Egypt continues its efforts to develop and raise the

efficiency of the human resources in the banking system. To this end, the Egyptian Banking Institute (EBI), an affiliate to the CBE, continues to hone the skills of the banking cadres, in line with its role in shoring up the national economy, by designing a number of training programs specialized in all banking fields. Such programs embrace activities that support the CBE's directives towards accelerating development and addressing the economic and social issues in a manner that achieves institutional development and the distinctive performance of the banking sector.

1/8/1- Activity of EBI

The Egyptian Banking Institute is considered one of the major training and

research institutions that contributes to boosting staff efficiency in both banking and financial sectors, at local and regional levels.

Locally, the EBI has provided a diversity of training programs and specialized

certificates that cater for the needs of banking and non-banking institutions. Also, it provides assessment services to all of its institutional clients, whether banks or corporations, through its Assessment Services Unit established in June 2015 by a decision of the EBI's BoD. The assessment results of this Unit help in selecting new recruitments, determining promotions, and putting in place plans for the development

Source: IMF World Economic Outlook - October 2017

-5

5

15

25

2014/2015 2015/2016 2016/2017

%External Debt Indicators

during FY

Debt Service / Current Receipts(including transfers)

Debt Service / Exports of Goods andServices

25


of employees at various institutions to meet their training needs. In FY 2016/2017, more than 14000 individuals from various banking and non-banking institutions were tested.

Furthermore, the Unit conducts the assessment phase of "Future Leaders

Program", by which English language proficiency and a number of crucial behavioral disciplines required for joining the program are assessed. This ensures the perfect and most accurate selection of candidates for this strategic program.

The following chart shows the number of executed programs and the number of

participants from 2014/2015 to 2016/2017:

The EBI continues to conduct the activities of Financial Literacy and the Development of Friendly Financial Products for Children and Youth Initiative, "Shaping the Future" through the development and implementation of the first phase of the project (School Bank) in cooperation with Banque Misr and an international school. The project aims at increasing the financial awareness of students, as well as providing a suitable financial product that entices them to save. The Institute seeks to expand the project to public schools. It has also developed and implemented, collaboratively with Visa International, the financial literacy project for civil servants (Payroll Project), to encourage them to use the newly issued payroll cards in payments, with the aim of creating a society more reliant on electronic payment system.

Notably, Egypt, represented by the EBI, won, for four consecutive years, five awards, from the Child and Youth Finance International organization (CYFI) as follows:

2014 Global Money Week Award for MENA region. 2015 Country Award for MENA region. Country Award for the MENA region and a recognition award of Global

Money Week in 2016. 2017 Country Award for MENA region.

1166

20081

1534

31551

1544

30124

0

5000

10000

15000

20000

25000

30000

35000

Number of Training Programs Number of Trainees

Training Activity

2014/2015 2015/2016 2016/2017

26


Due to the close relationship between financial inclusion and stability and the

CBE's concern about their positive impact on the economies, the EBI organized its ninth annual conference "Promoting Financial Inclusion in the Banking Sector" in May, 2017. The conference discussed over three diverse sessions an overview of financial inclusion developments and indicators at the international level, the role of central banks in realizing the objectives of financial inclusion, and enhancing access to formal banking sector. This is in addition to highlighting the relationship between De-risking practices and mechanisms, and their direct and indirect effects on efforts aimed at financial inclusion.

At the regional level, the EBI is expanding its activity through providing its

services to some institutions in the Arab region. It also taps the global expertise to transfer the best practices in international banking industry to the Egyptian banking sector by cooperating with major international providers of training programs to employees in banking and financial sectors.

1/8/2 –CBE Staff Programs

The number of participants in the training programs for CBE staff reached 2507 trainees in FY 2016/2017, involving 2016 participants in local programs (specialized and administrative, language, and computer courses), 339 trainees in qualifying programs, and 84 trainees in external programs. Also, 68 employees of the CBE's staff completed their post-graduate studies.

During the year under review, the Banking Institute offered different training programs for 1528 trainees in order to meet their various training needs. Such programs were diverse ranging from programs for the development of leadership and personal skills to a diversity of major banking and financial programs, in addition to computer programs and some assessment services.

585

154 107

1202

33984 68

2016

0

500

1000

1500

2000

2500

Qualifying Programs External Programs Post Graduate Programs Local Programs

No. of Participants

Participants from CBE in Training and Qualifying Programs

2015/2016 2016/2017

Chapter 2 : Banking Developments

2/1 Financial Position 2/2 Deposits 2/3 Lending Activity 2/4 Cash Flows 2/5 Bank Performance Indicators

27


Chapter 2 Banking Developments

2/1- Financial Position

The aggregate financial position of registered banks operating in Egypt (38 in number) posted LE 4420.9 billion at end of June 2017, up by LE 1574.8 billion or 55.3 percent in FY 2016/2017, well above the figures of the previous FY (LE 647.1 billion or 29.4 percent).

Roughly 57.9 percent of the rise on the liabilities side emanated from deposits at banks which grew by LE 911.7 billion or 43.1 percent, posting LE 3027.8 billion. Increases were also observed in: (i) obligations to banks in Egypt (including the CBE) by LE 225.6 billion, (ii) banks’ equities by LE 150.5 billion, (iii) obligations to banks abroad by LE 108.5 billion, (iv) bonds and long-term loans by LE 75.4 billion, and (v) banks' provisions by LE 41.0 billion.

Change in Liabilities

(LE mn) Change in FY +(-) 2015/2016 2016/2017 Value % Value % Capital 8176 8.8 27694 27.5 Reserves 12922 25.8 122844 195.0 Provisions 831 1.3 40979 61.3 Bonds and long-term loans 10079 26.2 75428 155.4 Obligations to CBE 1637 65.3 130224 3143.2 Obligations to banks in Egypt 38151 209.0 95341 169.0 Obligations to banks abroad 55913 185.5 108491 126.1 Total deposits 381939 22.0 911694 43.1 Other liabilities, of which: 137467 82.4 62071 20.4 Cheques payable 2809 34.4 1316 12.0

Total Liabilities 647115 29.4 1574766 55.3

Provisions2.4%

Bonds & Long-term

Loans2.8%

Obligations to Banks Abroad

4.4%

Obligations to Banks in

Egypt6.5%

Deposits68.5%

Other Liabilities

8.3%

Equities7.1%

Relative Structure of Liabilities (End of June 2017)


The increase on the assets side was mainly attributed to the hikes in balances with local banks (including the CBE) by LE 501.9 billion to post LE 876.5 billion at the end of June 2017. Likewise, lending and discount balances rose by LE 483.7 billion, banks' investments in securities and TBs by LE 253.4 billion, and balances with banks abroad by LE 232.9 billion worth.

Change in Assets

(LE mn) Change in FY +(-) 2015/2016 2016/2017 Value % Value % Cash 4051 14.8 26039 82.8 Securities and investments in TBs 267591 26.3 253420 19.7 Balances with CBE 96932 43.9 401222 126.4 Balances with banks in Egypt, of which: 37376 189.4 100678 176.3 Loans and discount balances 182 12.1 3031 180.2 Balances with banks abroad, of which: (3760) (6.9) 232892 456.0 Loans and discount balances (129) (8.5) 1111 79.9 Loans and discount balances (market) 224728 31.3 483730 51.3 Other assets 20197 14.2 76785 47.2 Total Assets 647115 29.4 1574766 55.3

Cash1.3%

Securities & Investments

in TBs 34.8%

Balances with Banks Abroad

6.4%

Balances at Banks in

Egypt19.8%

Loan & Discount Balances32.3%

Other Assets5.4%

Relative Structure of Assets(End of June 2017)

55.7

38.0

0.54.4

1.4

51.3

44.1

0.43.3 0.9

0

10

20

30

40

50

60

70

TreasuryBills

Gov. Bonds Non-gov.Bonds

Corp.Equities

ForeignSecurities

٪

Relative Structure of Banks' Portfolio Investment

June 2017

June 2016

29


Banks' investments in securities and bills rose by LE 253.4 billion or 19.7 percent to post LE 1537.0 billion (representing more than one-third of assets and more than half of deposits) at the end of June 2017. This rise was mostly due to the pickup in their investments in treasury bills (up by LE 198.6 billion), corporate equities (up by LE 25.1 billion), government bonds (up by LE 18.3 billion), and foreign securities (up by LE 9.9 billion worth). Meanwhile, banks' investments in non-government bonds increased by only LE 1.5 billion.

Over FY 2016/2017, net transactions of local banks with correspondents abroad increased by LE 124.4 billion worth or 355.6 percent, turning, as such, their net position into a credit balance of LE 89.4 billion worth at end of June 2017 (from a debit balance of LE 35.0 billion worth at end of June 2016). The increase was due to the hike in both their balances with banks abroad by LE 232.9 billion worth and their obligations thereto by LE 108.5 billion worth.

Transactions with Banks Abroad

(LE mn) Change in FY +(-)

End of June 2016

June 2017

2015/2016 2016/2017 Value % Value % Net Position -34986 89415 (59673) (241.7) 124401 (355.6)

Balances with banks abroad 51074 283966 (3760) (6.9) 232892 456.0

Obligations to banks abroad 86060 194551 55913 185.5 108491 126.1

2/2- Deposits

Banks' deposits (including government deposits) grew, during the reporting year, by LE 911.7 billion or 43.1 percent (or by LE 450.1 billion and 21.3 percent, excluding the effect of exchange rate liberalization), versus LE 381.9 billion or 22.0 percent in the previous FY, to stand at LE 3027.8 billion (or more than two-thirds of banks' aggregate financial position at end of June 2017). About 47.1 percent of the increase resulted from local currency deposits which rose by LE 429.2 billion or 25.4 percent, to LE 2120.8 billion at end of June 2017.

Deposits in foreign currencies went up by LE 482.5 billion worth or 113.7

percent (or by LE 20.9 billion worth and 4.9 percent, after excluding the effect of the exchange rate liberalization), to post LE 907.0 billion worth at end of June 2017.

30


Deposits at Banks by Sector (LE mn)

Local Currency Foreign Currencies End of June 2015 2016 2017 2015 2016 2017 Total 1369674 1691590 2120787 364504 424527 907024 Government sector 149115 258021 303714 96452 96876 204858 Public business sector 37893 43733 47290 15049 17925 38388 Private business sector 230143 263961 283312 78840 99432 192900 Household sector 942336 1116316 1475679 169137 206491 463078 External sector 10187 9559 10792 5026 3803 7800

Almost 83.7 percent of the increase in local currency deposits came from the household sector, whose deposits scaled up by LE 359.4 billion or 32.2 percent to LE 1475.7 billion at end of June 2017. Deposits of the government sector increased as well by LE 45.7 billion or 17.7 percent, those of the private business sector by LE 19.3 billion or 7.3 percent, those of the public business sector by LE 3.6 billion or 8.1 percent, and those of the external sector by LE 1.2 billion or 12.9 percent.

The household sector accounted for more than half the increase in foreign

currency deposits. Specifically, its deposits mounted by LE 256.6 billion worth. Similarly, deposits of the government sector rose by LE 108.0 billion worth, private and public business sectors by the equivalent of LE 93.5 billion and LE 20.4 billion, respectively, and those of the external sector by LE 4.0 billion worth.

2/3- Lending Activity

Banks expanded their lending activity by LE 483.7 billion or 51.3 percent in the reporting year (or by LE 199.1 billion and 21.1 percent, when excluding the effect of the exchange rate liberalization), against LE 224.7 billion and 31.3 percent a year earlier), bringing their lending balances to a total of LE 1426.5 billion, representing 32.3 percent of total assets and 47.1 percent of total deposits at end of June 2017.

73.0

17.7

0.4

111.5

15.4

8.1

19.1

114.2

14.7 7.3

26.1

94.0

18.5

32.2

22.1

124.3

(6.2)

12.9

(24.3)

105.1

(40)

(20)

0

20

40

60

80

100

120

140

2015/2016 2016/2017 2015/2016 2016/2017

%

Local Currency Foreign Currencies

Change Rate in Deposits by Sectors

Government sector Public business sector Private business sectorHousehold sector External sector

31


Bank Loans by Sector (LE mn)

Local Currency Foreign Currencies End of June 2015 2016 2017 2015 2016 2017 Total 479357 672578 867213 238642 270149 559244 Government sector 10855 100230 142710 55566 73510 212013 Public business sector 43742 65169 95621 19228 27663 52681 Private business sector 252405 302396 396626 151029 157261 279601 Household sector 171989 204470 231403 3302 3403 6938 External sector 366 313 853 9517 8312 8011

The pickup in lending and discount balances came on the back of the rise in both

local currency loans by LE 194.6 billion or 28.9 percent, to LE 867.2 billion at end of June 2017, and in those extended in foreign currencies by LE 289.1 billion worth or 107.0 percent (or by LE 4.5 billion worth and 1.7 percent, excluding the effect of the exchange rate liberalization), to LE 559.3 billion worth at end of June 2017.

Accounting for almost half of the increase in local currency loans, the share of the

private business sector soared by LE 94.2 billion or 31.2 percent, to reach LE 396.6 billion at end of June 2017 (making up 45.7 percent of total LE loans). Similarly, loans to the government sector rose by LE 42.5 billion or 42.4 percent, standing at LE 142.7 billion. Loans to the public business sector surged as well by LE 30.5 billion or 46.7 percent, the household sector by LE 26.9 billion or 13.2 percent. However, the increase in loans to the external sector was confined to LE 0.5 billion.

More than half the increase in lending and discount balances in foreign

currencies went to the government sector whose share increased by LE 138.5 billion worth, amounting to LE 212.0 billion and representing 37.9 percent of total foreign currency loans at end of June 2017. Likewise, loans extended to the private business sector scaled up by LE 122.4 billion worth, those to the public business sector by LE 25.0 billion worth, and those to the household sector by LE 3.5 billion worth. Conversely, loans to the external sector fell by LE 0.3 billion worth.

The relative distribution of loans by economic activity indicates that the manufacturing sector received around 41.3 percent of these loans (16.3 percent of which was in local currency and 25.0 percent in foreign currencies) at end of June 2017. The unclassified sectors, including the household, came next with a share of 25.6 percent, followed by services (24.7 percent), then trade (7.6 percent) and agriculture (only 0.8 percent).


At end of June 2017, loans and advances (excluding discounts) by maturity registered LE 1418.4 billion, up by LE 481.3 billion or 51.4 percent during the reporting year. The increase was ascribable to the growth in long-term loans (more than one year) by LE 245.7 billion or 45.7 percent (owing to the rise in both local and foreign currency loans by LE 104.2 billion and LE 141.5 billion worth, in order). Furthermore, short-term loans (one year or less) increased by LE 235.6 billion or 59.0 percent, due to the growth in local and foreign currency loans by LE 88.1 billion and LE 147.5 billion worth, respectively.

2/4- Cash Flows

Monitoring banks' cash flows arising from local and foreign operations aims at identifying the sources and uses of funds during the fiscal year. Banks' sources of funds come from either an increase in obligations or a decrease in assets. Uses of funds are directed to increasing assets or reducing obligations.

Regarding local operations, it is noted that the resources of banks were generated from the increase in obligations (up by about LE 1466.3 billion) in FY 2016/2017. The rise in obligations came mainly from deposits at banks which grew by LE 911.7 billion (47.1 percent of which was in local currency). About 67.6 percent of the rise in deposits was contributed by the household sector whose deposits rose by LE 615.9 billion. Similarly, equities increased by LE 150.5 billion, as well as obligations to the CBE by LE 130.2 billion, and obligations to banks in Egypt by LE 95.4 billion. In addition, loans and bonds went up by LE 75.4 billion, provisions by LE 41.0 billion, and so did other liabilities by LE 62.1 billion.

0

100

200

300

400

500

600

LE bnCredit Facilities by Economic Activity

At End of June 2017

Foreign Currencies Local Currency

33


Local uses were mostly directed to increase assets by LE 1332.0 billion. In figures, lending and discount balances grew by LE 483.7 billion, balances with the CBE (by LE 401.2 billion), investments of banks in securities and treasury bills (mostly in government bonds and bills) by LE 243.6 billion. Increases were also seen in balances with local banks (by LE 100.7 billion), cash (by LE 26.0 billion), and other assets (by LE 76.8 billion).

Cash flows of banks in the reporting year revealed a surplus of LE 134.3 billion in local operations. However, external operations showed a deficit equal to that surplus. This indicates that the deficit of external operations was financed by the surplus of local operations.

Banks' Cash Flow Statement*

Local Operations (LE mn)

2015/2016 2016/2017 1. Total Resources: 591202 1466275 A. From the Increase in Obligations (Liabilities) 591202 1466275 Deposits 381939 911694 Capital accounts (equities) 21098 150538 Obligations to the CBE 1637 130224 Obligations to local banks 38151 95341 Loans and bonds 10079 75428 Provisions 831 40979 Other liabilities 137467 62071

B. From the Decrease in Assets 0 0

2. Total Uses: 653828 1332004 A. To Reduce Obligations 0 0 B. To Increase Assets 653828 1332004 Lending and discount 224728 483730 Balances with the CBE 96932 401222 Investments in securities and bills 270543 243550 Balances with local banks 37377 100678 Cash 4051 26039 Other assets 20197 76785 Sources/Uses Surplus (+) or Deficit (-) -62626 134271

* Figures in this statement represent the difference between the balances at end of the reporting year and the preceding FY.

As for banks' external operations, resources emanated from the increase in obligations stemmed mainly from the surge in obligations to banks abroad by the equivalent of LE 108.5 billion. This rise was used for the increase of assets by the equivalent of LE 242.8 billion, distributed on increasing balances with banks abroad by LE 232.9 billion worth, and banks' investments in foreign securities and bills by LE 9.9 billion worth.


Banks' Cash Flow Statement* External Operations

(LE mn) 2015/2016 2016/2017 1. Total Resources: 62626 108491

A. From the Increase in Obligations 55913 108491 Obligations to banks abroad 55913 108491

B. From the Decrease in Assets 6713 0 Balances with banks abroad 3760 0 Investment in foreign securities and bills 2953 0

2. Total Uses: 0 242762 A. To Reduce Obligations 0 0 B. To Increase Assets 0 242762

Balances with banks abroad 0 232892 Investment in foreign securities and bills 0 9870

Sources/Uses Surplus (+) or Deficit (-) 62626 -134271

* Figures in this statement represent the difference between the balances at end of the reporting year and the preceding FY.

2/5- Bank Performance Indicators The following are the results realized by banks according to their financial positions at end of June 2017: First: Capital Adequacy Ratio+ (Including the Capital Conservation Buffer)

Within the framework of applying Basel standards, local banks (excluding branches of foreign banks) are required to maintain a minimum capital adequacy ratio of 11.250 percent of the capital base (numerator) to risk-weighted assets (denominator), to cover credit, market and operational risks. As for branches of foreign banks, they are subject to Basel II regulations, except for maintaining the aforementioned ratio. A follow-up of banks’ compliance with this standard revealed the following findings:

For banks combined, the ratio, including the capital conservation buffer, reached 14.5 percent (against a mandatory minimum ratio of 11.250 percent). The banks' tier 1 capital, including the capital conservation buffer, reached 11.4 percent (against a mandatory minimum ratio of 7.25 percent as of the first of January 2017). Common equity stood at 8.5 percent (against a mandatory minimum ratio of 4.5 percent as of the 1st of January 2015).

+ According to the BoD decision, dated 6 January 2016, the increase of Risk-Weighted Assets ratio shall be applied, if

the total credit facilities of the 50 largest customers and related parties exceeds 50% of its credit portfolio.

35


All banks abided by the minimum capital adequacy ratio (including the

conservation buffer) of 11.25 percent, except for two banks that are kept under continuous scrutiny by the CBE. The leverage ratio reached 6.2 percent against an indicative ratio of 3 percent.

Second: Asset Quality

On 24 May 2005, the CBE issued the regulations governing customer credit rating and provisioning, taking into account the obligor risk rate (ORR), the loans for consumer purposes, real estate loans for personal housing, and loans for small-sized economic enterprises.

On 16 December 2008, the CBE issued the rules entitled “Preparation and

presentation of banks’ financial statements and the principles of recognition and measurement”, regarding the provision for impairment losses based on two principles:

- Historical failure rates for loans with similar credit characteristics. - The difference between the book value and the net present value of the

enterprises future cash flows for which historical failure rates are not calculated.

The following chart shows the beneficiary entities of credit facilities.

Less than 11.25%(2 banks)

From 11.25% to less than

15%(15 banks)

From 15% to 20%

(18 banks)

More than 20%

(3 banks)

Capital Adequacy Standard at End of June 2017


The ratio of non-performing loans and facilities to total loans and facilities reached 5.5 percent, whereas the provisions of loans and facilities/ non-performing loans and facilities registered 99.1 percent. Third: Profitability

This indicator shows the level of profitability realized by a bank, its ability to strengthen its equities, and to distribute dividends among its shareholders. The return on average assets and equities of the banking system reached 2 percent and 30.9 percent, in order, while net interest margin was 4.6 percent for FY 2016 (according to the latest approved financial statements). A follow-up of banks' profitability levels revealed the following: A- Banks whose FY ends June 30 (public sector banks and the Export

Development Bank of Egypt)

Net profits amounted to LE 16237 million for the FY ending 30 June 2016 against LE 8567 million for the FY ending 30 June 2015 (the surge in profits in 2016 compared with that of 2015 was mainly traced to the increase in profits realized by the National Bank of Egypt and Banque Misr).

The ratios of banks' net profits to average assets and to average equities stood at 1.3 percent and 30.5 percent, in order (against 0.9 percent and 20.2 percent in 2015).

for consumption and real-estate

(personal housing) purposes

11%

for medium-size enterprises

6%

for small-size economic enterprises

5%

for corporates78%

Banks' Contingent Liabilities and Loans

37


B- Banks whose FY ends December 31

Banks' net profits for the FY ending December 31, 2016 registered LE 44958 million (against LE 25171 million for the FY ending 31 December 2015).

The ratio of banks' net profits to average assets was 2.3 percent (against 2.0 percent in 2015), and to average equities 31.0 percent (against 26.3 percent).

8567

16237

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2015 2016

Net Profits of Commercial Banks Whose FY Ends June 30

LE mn

25171

44958

0

10000

20000

30000

40000

50000

2015 2016

Net Profits of Commercial Banks Whose FY Ends December 31

LE mn

Chapter 3 : Macroeconomic Developments

Gross Domestic Product (GDP) 3/1

Labor Force, Employment and Unemployment 3/1/1

Inflation 3/2

Public Finance 3/3

Budget Sector

Balance of Payments and Foreign Trade 3/4

Balance of Payments 3/4/1

Current Account 3/4/1/1

Capital and Financial Account 3/4/1/2

Foreign Trade 3/4/2

Merchandise and Sectoral Distribution of Exports by Degree

of Processing

3/4/2/1

Merchandise and Sectoral Distribution of Imports by Degree

of Use

3/4/2/2

Foreign Trade by Geographical Distribution 3/4/2/3

Foreign Trade by Main Commodity and Merchandise

Balances

3/4/2/4

Non-Banking Financial Services Sector 3/5

Stock Market 3/5/1

39


Chapter 3 Macroeconomic Developments

3/1- Gross Domestic Product (GDP)

According to the data issued by the Ministry of Planning, Monitoring and Administrative Reform1, real GDP growth at factor cost increased, thereby registering 3.6 percent in FY 2016/2017 from 2.3 percent a year earlier. This increase resulted from the noticeable growth achieved during Q3 and Q4 of the reporting year as the growth rate during these two quarters rose to 4.3 percent and 4.8 percent from 1.6 percent and 2.3 percent, in order.

Meanwhile, real GDP at market prices reached 4.2 percent against 4.3 percent a

year earlier. Also, real GDP at market prices stood at 4.4 percent and 5.0 percent in Q3 and Q4 against 3.7 percent and 4.5 percent, respectively.

Real GDP

Source: Tables (6/1) and (6/2) in the Statistical Annex. The base year is 2011/2012.

1 The Ministry of Planning, Monitoring, and Administrative Reform revised GDP estimates based on the economic

census for FY 2012/13 that was issued by the CAPMAS in December 2014. The Ministry also revised the data issued to cover a larger number of enterprises. The results were used to revise the GDP series for the period starting from 2011/2012 till the reporting year.

Value (in LE bn) Rate of Change (%)

FY April/June FY April/June 2015/16 2016/17 2015/16 2016/17 2015/16 2016/17 2015/16 2016/17

Real GDP at factor cost 1906.1 1974.2 482.8 505.8 2.3 3.6 2.3 4.8

Indirect taxes (net) 12.0 24.1 3.0 4.3 - - - - Real GDP at market prices

1918.1 1998.3 485.8 510.1 4.3 4.2 4.5 5.0

2.2 2.2

2.93.4

2.3

3.6

0.3 0.4

5.2

3.32.9

2.2 2.01.7 1.6 1.6

3.4

5.14.6

4.1

2.22.5

3.2

2.11.6

2.3

1.7

3.6

4.34.8

0

1

2

3

4

5

6

2011/2

012

2012/2

013

2013/2

014

2014/2

015

2015/2

016

2016/2

017

Ju

ly/S

ept.

Oct./D

ec.

Jan./M

ar.

Apr.

/June

Ju

ly/S

ept.

Oct./D

ec.

Jan./M

ar.

Apr.

/June

Ju

ly/S

ept.

Oct./D

ec.

Jan./M

ar.

Apr.

/June

Ju

ly/S

ept.

Oct./D

ec.

Jan./M

ar.

Apr.

/June

Ju

ly/S

ept.

Oct./D

ec.

Jan./M

ar.

Apr.

/June

Ju

ly/S

ept.

Oct./D

ec.

Jan./M

ar.

Apr.

/June

2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017

Real GDP Growth Rates

(At Factor Cost)%


GDP (at factor cost and 2011/2012 prices)

On the supply side, the increase in the real GDP growth at factor cost to 3.6 percent in FY 2016/2017 (compared with 2.3 percent in the previous FY) reflected the remarkable improvement in the contributions of the following sectors: tourism (0.1 percentage point against -0.7 point), extractions (-0.2 point against -0.7 point), and manufacturing (0.3 point against 0.1 point). Add to this the relative improvement in the contributions of the real estate (0.5 point against 0.4 point), and communications (0.4 point against 0.3 point). However, the increase in the GDP growth was mitigated by the lower contributions of the general government (0.3 point against 0.5 point), electricity (nil against 0.1 point), and transportation and storage (0.2 point against 0.3 point). Meanwhile, the contributions of other sectors combined remained unchanged at 2.0 points during the reporting and comparison years.

As regards the private and public sectors' contributions to real GDP growth (3.6 percent), the private sector's contribution went up to 3.1 percentage points in FY 2016/2017, from 1.9 point in the previous FY. This came primarily on the back of the significant pickup in the share of tourism to register 0.1 point against -0.7 point during the year of comparison. Add to this the rise in the contributions of the following sectors: manufacturing (0.4 point against 0.1 point), real estate (0.5 point against 0.4 point), communications (0.3 point against 0.2 point), and extractions (nil against -0.1 point). However, lower contributions were seen in construction and building (0.4 point against 0.5 point), and wholesale and retail trade (0.6 point against 0.7 point). Meanwhile, the contributions of other sectors combined remained unchanged at 0.8 point.

On the other hand, the contribution of the public sector to GDP growth slightly

inched up to 0.5 percentage point (from 0.4 point). This was ascribed to the improvement in the negative contribution of extractions (-0.2 point against -0.6

3.2

-1.8

2.11.9 3.9

9.5 5.312.5

4.0 1.4 5.2 4.0 4.0 3.9 5.2 3.0 4.0

-28.5-35-25-15

-55

152535

Agricu

ltur

e, Fore

sts

& F

ishin

g

Ext

ract

ions

Manufa

ctu

ring

Ele

ctric

ity

Wate

r, S

ani

tatio

n &

Recyc

ling

Cons

truct

ion &

Bui

ldin

g

Tra

nsp

ortatio

n &

Sto

rage

Com

munic

atio

ns

Info

rmatio

n

Sue

z C

ana

l

Whole

sale

& R

eta

il T

rade

Fin

anc

ial I

nte

rmedia

ries

& A

uxili

ary

Serv

ices

Soci

al In

sur

ance

& Insu

ranc

e

Tourism

Real

Esta

te

Gene

ral G

overn

men

t

Soci

al S

ervi

ces

% Change rates of real GDP during FY (Annual Basis)

2016/2017

41


point), and to the higher contributions of construction & building, and wholesale & retail trade (0.1 point against nil for each). Conversely, decreases were seen in the contributions of the general government (0.3 point against 0.5 point), manufacturing (-0.1 point against nil), and electricity and transportation & storage (nil against 0.1 point for each). In the meantime, the contributions of other sectors combined remained stable at 0.3 point.

GDP by Expenditure (at 2011/2012 market prices)

On the demand side, the real GDP growth at market prices registered 4.2 percent during the year under review, compared with 4.3 percent in the previous FY. This slight decline was traced to the retreat in the contribution of domestic demand (consumption and investment) to 5.5 points (against 5.9 points), primarily owing to the decrease in the contribution of final consumption. Meanwhile, the negative contribution of net external demand (exports of goods and services less imports of goods and services) improved to record -1.3 point (against -1.6 point), reflecting the significant rise in export proceeds (denominated in LE) by 86.0 percent that surpassed the 52.5 percent increase in import payments.

The share of domestic demand (5.5 percentage points) was a dual effect of the retreat in final consumption (government and private) to 3.7 points (from 4.3 points) and the increase in the capital formation to 1.8 point (from 1.6 point). Also, total investments (at constant prices) augmented by 12.2 percent to LE 325.3 billion during the reporting year, compared with LE 290.0 billion in the previous FY.

The reporting year witnessed a remarkable growth in investments at current

prices by 31.2 percent to LE 514.3 billion compared with a year earlier. Investments of the private sector declined to 52.6 percent of total investments (from 58.0 percent), while public investments moved up to 47.4 percent (from 42.0 percent).

-1.6-1.3

1.6 1.8

4.33.7

4.3 4.2

-2

-1

0

1

2

3

4

5

2015/2016 2016/2017

Contributions of Demand Components to Real GDP Growth

(at market prices)

Net Exports Capital Formation Final Consumption Real Growth Rate

Percentage point


The relative distribution of the majority of these investments (92.3 percent) ran as follows: productive services (21.8 percent); extractions (17.5 percent); electricity (13.8 percent); real estate (12.4 percent); social services (education, health, sanitation and others) (10.5 percent); manufacturing (9.5 percent); agriculture, irrigation and fishing (4.3 percent); and construction and building (2.5 percent).

Rates of Change and Share of Demand Components

in Real GDP Growth at Market Prices

Contributions of individual sectors may not sum to total growth due to rounding. Source: Rates of change are illustrated in Table (6/2) of the Statistical Annex. Contributions of demand components are calculated by researchers.

3/1/1- Labor Force, Employment and Unemployment

According to CAPMAS quarterly Labor Force Sample Survey (LFS) for Q4 (April/June 2016/2017), the size of labor force rose by 651 thousand persons or 2.3 percent, as compared with the corresponding quarter of FY 2015/2016, reaching 29.183 million persons. Similarly, the number of employed mounted by 715 thousand persons or 2.9 percent, compared with the corresponding quarter, to stand at 25.687 million persons. The sector of agriculture and fishing continued to acquire the majority of the total number of employed (20.4 percent) during the quarter under review, followed by construction and building (13.7 percent), wholesale and retail trade (13.0 percent), manufacturing (12.5 percent), and transportation and storage (7.7 percent).

Share in Real GDP Growth

(Percentage Point)*

Rates of Change

+ (-) (%)

FY April/June FY April/June

2015/16 2016/17 2015/16 2016/17 2015/16 2016/17 2015/16 2016/17

Real GDP Growth 4.3 4.2 4.5 5.0 4.3 4.2 4.5 5.0 1-Domestic Demand 5.9 5.5 6.2 4.0 5.5 5.0 5.8 3.7

A- Final Consumption 4.3 3.7 2.0 2.8 4.6 4.0 2.2 3.1

Private 3.8 3.4 1.3 2.4 4.7 4.2 1.7 3.2

Public 0.5 0.3 0.7 0.4 3.9 2.5 4.8 2.8

B- Capital Formation (Including Change in Stock)

1.6 1.8 4.2 1.2 11.2 11.3 26.0 6.3

2- Net External Demand -1.6 -1.3 -1.7 1.0 18.4 13.7 26.1 (12.7)

A- Exports of Goods and

Services -2.1 9.7 -0.3 15.4 (15.0) 86.0 (2.4) 119.9

B- Imports of Goods and

Services -0.5 11.0 1.4 14.4 (2.2) 52.5 6.9 69.1

43


As a result, the number of unemployed retreated in the quarter under review,

compared with the corresponding quarter of the preceding FY, to reach 3.496 million persons. Thus, the unemployment rate fell to 12.0 percent of the total labor force (from 12.5 percent in the corresponding quarter of FY 2015/2016).

According to the quarterly LFS for Q4, the number of jobless males declined to

8.2 percent (from 8.5 percent in the corresponding quarter) and jobless females to 24.7 percent (from 25.6 percent). Similarly, unemployment in the urban sections decreased to 13.6 percent (from 14.1 percent) and in rural areas to 10.7 percent (from 11.2 percent). It is worth mentioning that 79.6 percent of the total jobless persons were among youth (aged between 15 and 29 years), and 92.8 percent were holders of intermediate, above intermediate, university and post graduate degrees.

3/2- Inflation

A- Consumer Price Index (CPI)

According to the data published by the Central Agency for Public Mobilization

and Statistics, the annual headline CPI (urban) picked up by 29.8 percent in FY 2016/2017 (versus 14.0 percent a year earlier). This pickup was ascribed to the measures taken by the State under the economic reform program, particularly liberalizing the LE exchange rate, enforcing the Value Added Tax (VAT) Law, and raising fuel prices within the framework of reforming the subsidy system. Accordingly, the shares of most of the key CPI groups increased.

12.7

13.2

13.0

12.8

12.5 12.512.6

12.4

12.0 12.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

11.2

11.4

11.6

11.8

12.0

12.2

12.4

12.6

12.8

13.0

13.2

13.4

2012 2013 2014 2015 2016 Apr./June2016

July/Sept.2016

Oct./Dec.2016

Jan./Mar.2017

Apr./June2017

La

bo

r F

orc

e a

nd

Em

plo

yme

nt

%

Un

em

plo

yme

nt

Ra

te %

Unemployment rate Labor force Employment

Labor Market Indicators (Growth Rates on an Annual Basis for Labor Force, Employment, and Unemployment Rate)


The shares of all main groups increased, except for healthcare which declined to 0.7 point during the reporting year (from 1.6 point a year earlier). About 66.0 percent of the CPI inflation (29.8 percent) was concentrated in the group of food and beverages whose share markedly rose to 19.6 percentage points (against 8.3 points). Meanwhile, about 32 percent was concentrated in the shares of the other key groups combined recording 9.5 points (against 4.1 points), including, restaurants and hotels (1.3 point); culture and recreation (1.2 point); transportation (1.1 point); housing, water, and electricity (1.0 point); and alcoholic beverages & tobacco (1.3 point).

The rise in the share of food and beverages (19.6 percentage points) during the

year under review reflects the higher contribution of all the following subgroups: meat and poultry (5.2 points against 1.7 point); milk, cheese and eggs (2.9 points against 0.3 point); fish and seafood (1.6 point against 0.2 point); oils and fats (1.5 point against 0.4 point); fruits (1.3 point against 0.5 point); sugar and confectionaries (0.8 point against 0.1 point); vegetables (3.9 points against 3.6 points); and cereals and bread (1.6 point against 1.3 point). The shares of the other groups combined reached 0.8 point (against 0.2 point).

0.05.0

10.015.020.025.030.035.040.045.0

Jun

e 20

15

July

Aug

.

Sep

t.

Oct

.

No

v.

De

c.

Jan

.201

6

Feb

.

Mar

.

Apr

il

May

Jun

e

July

Aug

.

Sep

t.

Oct

.

No

v.

De

c.

Jan

.201

7

Feb

.

Mar

.

Apr

il

May

Jun

e 17

Rate of Change in Headline CPI Rate of Change in Food and Non-Alcoholic Beverages

Annual Rates of Change in Headline Consumer Price Index (Urban) & Food

and Non-Alcoholic Beverages %

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Bread & Cereals Meat & Poultry Fish & Seafood Milk, Cheese &Eggs

Vegetables Non-AlcoholicBeverages

Percentage Point

Contributions of Main Items of Food & Non-Alcoholic Beverages to Annual Headline Inflation

During the Fiscal Year

2015/2016 2016/2017

45


The following table shows the rates of change and shares of CPI groups (urban) in headline inflation in the years of review and comparison:

Main CPI Groups

Relative Weight

Rates of Change (%)

in FY

Share in Rate of Change (Percentage Point)

in FY 2015/16 2016/17 2015/16 2016/17

General Index 100.0 14.0 29.8 14.0 29.8 Food & beverages 39.92 17.6 40.3 8.3 19.6 Alcoholic beverages and tobacco 2.19 2.0 33.9 0.1 1.3 Clothing and footwear 5.41 10.2 29.7 0.4 1.2 Housing, water, electricity, gas & fuel 18.37 5.3 7.7 0.7 1.0 Furnishings, household equipment and routine

maintenance 3.77 13.4 28.2 0.5 0.9 Healthcare 6.33 31.5 12.7 1.6 0.7 Transportation 5.68 3.7 25.9 0.2 1.1 Communications 3.12 0.0 1.8 0.0 0.0 Culture & recreation 2.43 13.4 48.3 0.4 1.2 Education 4.63 11.2 12.3 0.6 0.7 Restaurants and hotels 4.43 21.4 24.5 1.0 1.3 Miscellaneous goods and

services 3.72 8.6 31.9 0.2 0.8 Source: For the rates of change in CPI groups: Table (6/3) in the Statistical Annex. For the shares of CPI groups: Economic Research

Sector.

Urban headline CPI (m/m) amounted to 2.2 percent on average in the year under

review (against 1.1 percent in the year of comparison), registering its highest level (4.8 percent) in November 2016 that witnessed the exchange rate liberalization (against -0.3 percent in November 2015). Such a rise in inflation during the year reflected its remarkable increase during the three months ending in January 2017. In figures, inflation rate during these three months registered 4.8 percent, 3.1 percent, and 4.1 percent, in order, following the exchange rate liberalization in November 2016. Then, the inflation (m/m) trended downwards starting from February 2017, to reach 0.8 percent in June 2017.


B- Producer Price Index (PPI) The headline PPI inflation noticeably rose in FY 2016/2017 by 34.9 percent

against a rise of 5.7 percent in the preceding FY, reflecting the economic reform measures and the exchange rate liberalization mentioned earlier. This rise was driven by the higher contributions of all main groups except for the group of water supply, sanitation, and waste treatment and management. In figures, the share of manufacturing moved up to 19.6 percentage points (against 2.1 points); agriculture and fishing to 12.6 points (against 5.0 points); food services and accommodation to 1.2 point (against 0.3 point); electricity, gas, steam, and air conditioning supplies to 1.1 point (against 0.2 point); transportation and storage to 0.3 point (against 0.1 point); and mining and quarrying to 0.1 point (against -2.5 points).

The following table illustrates the rates of change and shares of PPI groups in headline inflation during the years of review and comparison:

-1

0

1

2

3

4

5

6

Jun-15

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.2016

Feb.

Mar.

April

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.2017

Feb.

Mar.

April

May

Jun-17

Monthly Rate of Change in Headline CPI (Urban)%

-2.2

5.7

34.9

-5

0

5

10

15

20

25

30

35

40

2014/2015 2015/2016 2016/2017

Annual Rate of Change in Producer Price Index (2004/2005=100)%

47


Rates of Change and Shares of PPI Groups (2004/2005=100) in Headline Inflation

Main PPI Groups

Relative Weight

Rate of Change

(%) in FY

Share in Rate of Change

(Percentage Point) in FY

2015/16 2016/17 2015/16 2016/17

General Index 100.0 5.7 34.9 5.7 34.9

Agriculture and fishing 25.1 13.7 32.0 5.0 12.6

Mining and quarrying 21.8 -18.6 1.0 -2.5 0.1

Manufacturing 38.9 5.5 51.3 2.1 19.6

Electricity, gas, steam, and air

conditioning supplies 2.3 6.3 40.9 0.2 1.1

Water supply, sanitation, and

waste treatment and

management 2.0 24.9 0.0 0.5 0.0

Transportation and storage 2.8 3.0 12.8 0.1 0.3

Food services and

accommodation 5.0 7.2 34.9 0.3 1.2

Information and

Communications 2.1 0.0 0.0 0.0 0.0 Source: For rates of change: Table (6/4) in the Statistical Annex. For the shares of PPI group: the Economic Research Sector.

3/3- Public Finance

Budget Sector

According to the Ministry of Finance's preliminary data on the actual execution of fiscal operations of the state budget (administrative system, local administration and service authorities) for FY 2016/2017, the overall deficit widened by LE 40.0 billion to LE 379.5 billion, from LE 339.5 billion in the previous FY. Despite the rise in the budget deficit as an absolute value, its ratio to GDP fell to 10.9 percent (against 12.5 percent). Also, the primary deficit as a percentage of GDP declined from 3.5 percent in FY 2015/2016 to 1.8 percent in FY 2016/2017.

The drop in both the primary and overall deficit as a percentage of GDP -during

the year under review compared to the year of comparison- mirrored the impact of the reforms and measures recently taken in the area of public finance to achieve fiscal sustainability under the comprehensive economic reform program currently adopted by the government.


Total revenues registered LE 659.2 billion (19.0 percent of GDP) in FY

2016/2017, against LE 491.5 billion (18.1 percent of GDP) in the preceding FY, up by LE 167.7 billion or 34.1 percent. This was ascribed to the increase in tax revenues by LE 109.7 billion or 31.1 percent, to LE 462.0 billion (70.1 percent of total revenues); and non-tax revenues by LE 58.0 billion or 41.7 percent, to LE 197.2 billion (29.9 percent of total revenues).

The surge in tax revenues by LE 109.7 billion mainly came as a confluence of

the following developments:

- Taxes on goods and services increased by LE 68.1 billion or 48.5 percent, owing to the increase in revenues from taxes on both local & imported goods and on international and local communications services. Add to this the rise in stamp duties on contracts of water, electricity, gas and telephone companies, as well as advertisements, transportation services and insurance.

- Taxes on income and capital gains augmented by LE 22.2 billion, due to higher proceeds from taxes on: (1) salaries by LE 8.7 billion, (2) Suez Canal by LE 7.4 billion, (3) EGPC by LE 5.2 billion, and (4) other companies by LE 10.3 billion. By contrast, proceeds from taxes on profits from the CBE retreated by LE 9.4 billion as the CBE incurred the burdens of high interest rates after the exchange rate liberalization during this fiscal year.

12.211.5 12.5

10.9

3.9 3.6 3.5 1.80.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2013/2014 2014/2015 2015/2016 2016/2017

Revenues Expenditures Overall Budget Deficit Primary Deficit

Revenues, Expenditures, Overall Budget and Primary Deficit as a

Percentage of GDPRevenues &

Expenditures Overall Budget and

Primary Deficit (% )

(% )

71.7%

28.3%

70.1%

29.9%

2015/2016Actual

2016/2017

Preliminary Actual

Total Revenues

Non-Tax Revenues Tax

Revenues

49


- Property taxes moved up by LE 8.5 billion or 30.5 percent, reflecting the rise in revenues from taxes on T-bills and bonds' payable interest.

- Taxes on international trade (customs) increased by LE 6.2 billion.

The rise in non-tax revenues by LE 58.0 billion was explained by the following developments:

Property income went up by LE 21.7 billion, due to collecting exceptional

revenues from selling the 4G frequencies to telecommunications companies.

External grants increased by LE 14.1 billion during the FY.

Proceeds from selling goods and services grew by LE 9.0 billion, owing to the increase in receipts from special accounts and funds during this year.

Other miscellaneous non-tax revenues picked up by LE 13.2 billion.

Total expenditures reached LE 1031.9 billion (29.7 percent of GDP) in FY 2016/2017, compared with LE 817.8 billion (30.2 percent of GDP) in the preceding FY, up by LE 214.1 billion or 26.2 percent as a result of:

- The rise in subsidies, grants and social benefits by LE 75.7 billion, mainly as

follows: Subsidy costs rose by LE 63.8 billion, primarily due to the rise in both oil

subsidy by LE 64.0 billion (in the light of the exchange rate liberalization); and subsidies of supply commodities by LE 4.8 billion. Meanwhile, other miscellaneous subsidy items fell by LE 5.0 billion.

Social benefits moved up by LE 10.3 billion, ascribable to the country's

higher contribution to pension funds. Grants extended by the government to some international institutions,

foreign governments and general government entities scaled up by LE 1.1 billion.

- The increase in interest payments on domestic and external debts by LE 73.0

billion.

- The remarkable growth in investments of budget sector related entities by LE 39.9 billion, as the government continued to increase public investments to develop the infrastructure, and to expand both housing projects and investments in health and education sectors. This reflects the government's determination to go ahead with achieving the aspired objectives of the economic reform program.

- The rise in state workers' wages and compensations by LE 11.8 billion.

- The increase in spending on purchases of goods and services by LE 6.8 billion.

- The pickup in other miscellaneous expenditures by LE 6.9 billion.

50


Against this background, the cash deficit of the budget sector reached LE 372.7

billion or 10.7 percent of GDP in FY 2016/2017. By adding the net acquisition of financial assets (LE 6.8 billion) to the cash deficit, the overall deficit would rise by LE 40.0 billion to post LE 379.5 billion or 10.9 percent of GDP (against LE 339.5 billion or 12.5 percent of GDP a year earlier).

Summary of the Fiscal Operations of the Budget Sector

(LE mn)

Revenues 2015/16 2016/17 Expenditures 2015/16 2016/17

Total Revenues 491488 659184 Total Expenditures 817844 1031941

Tax revenues 352315 462007 Workers' wages and compensations 213721 225513

Taxes on income & profits 144743 166897 Purchases of goods & services 35662 42450

Taxes on property 27990 36539 Interest 243635 316602 Taxes on goods & services 140525 208624

Subsidies, grants & social benefits 201024 276719

Taxes on international trade (customs) 28091 34255 Subsidies 138724 202559

Other taxes 10966 15692 Grants 7806 8919

Grants 3543 17683 Social benefits 53919 64194 Other revenues, of which: 135630 179494 Others 575 1047

Property income 69452 91141

Purchases of non-financial assets (investments) 69250 109141

Sales of goods & services 29052 38058 Other expenditures 54552 61516

26.1%

4.4%

29.8%

24.6%

8.5%6.6%

21.9%

4.1%

30.7%

26.8%

10.6%

5.9%

Total Expenditures

Compensations

of Employees

Purchases of

Goods and Services

Interest on

Domestic and External Debt

Subsides,

Grants and Social

Benefits

Purchases of Non-

Financial Assets (Investments)

Other

Expenditures

2015/2016Actual

2016/2017

Preliminary Actual

51


3/4 – Balance of Payments and Foreign Trade 3/4/1 Balance of Payments

During FY 2016/17, Egypt's BOP ran an overall surplus of US$ 13.7 billion (of which US$ 12.2 billion were recorded in the period of Nov./June 2016/17 that followed the decision of exchange rate liberalization) against an overall deficit of US$ 2.8 billion a year earlier. The capital and financial account achieved a net inflow of US$ 29.0 billion (against US$ 21.2 billion), while the current account deficit narrowed by 21.5 percent to only US$ 15.6 billion (against US$ 19.8 billion).

The decline in the current account deficit during the reporting year reflected the following developments:

- The trade deficit narrowed by 8.4 percent to US$ 35.4 billion (against US$ 38.7 billion), as export proceeds increased by US$ 3.0 billion to US$ 21.7 billion (against US$ 18.7 billion); and import payments decreased by US$ 265.6 million to US$ 57.1 billion (against US$ 57.4 billion).

- Net unrequited current transfers increased by 4.1 percent to US$ 17.5 billion

(against US$ 16.8 billion), mainly reflecting the increase in net private transfers to US$ 17.3 billion (against US$ 16.7 billion) due to the pickup in remittances of Egyptians working abroad to US$ 17.5 billion (against US$ 17.1 billion).

- The services surplus grew by 4.3 percent to US$ 6.8 billion (against US$ 6.5

billion), as the rise in services receipts exceeded that in services payments.

- The deficit on investment income balance shrank by 1.1 percent to US$ 4.4 billion (against US$ 4.5 billion).

During the period under review, the capital and financial account achieved a net

inflow of US$ 29.0 billion (against US$ 21.2 billion), due to the following developments.

- The net inflow of FDI in Egypt scaled up to US$ 7.9 billion (against US$ 6.9 billion).

- Portfolio investment in Egypt accelerated to achieve a net inflow of US$ 16.0

billion (against a net outflow of US$ 1.3 billion).

- Medium- and long-term loans and facilities unfolded net disbursements of US$ 5.6 billion (against US$ 1.3 billion).

- Other assets and liabilities achieved a net outflow of US$ 2.5 billion

(against a net inflow of US$ 8.5 billion).

The following table shows the BOP main indicators according to GDP estimates and a detailed review of the developments in the BOP components during FY 2016/2017 compared with a year earlier.


Balance of Payments Indicators

FY (%) 2015/2016* 2016/2017*

Trade Balance: - Merchandise exports/GDP 5.6 9.2 Oil exports/Total exports 30.3 30.2

Crude oil exports/Oil exports 62.7 58.6 - Merchandise imports/GDP 17.1 24.3 Non-oil imports/Total imports 83.8 80.4

Foodstuffs & cereals imports/Non-oil imports 21.1 22.5

Oil products imports/Total imports 14.6 16.9 - Volume of foreign trade/GDP 22.7 33.5

- Coverage ratio of merchandise exports/Merchandise imports 32.6 38.0 - Trade balance/GDP (11.5) (15.1) Services Balance: - Services balance/GDP 1.9 2.9

Total services receipts/GDP, of which: 4.8 7.1 Suez Canal receipts/GDP 1.5 2.1 Tourism/GDP 1.1 1.9 Transfers:

- Net transfers/GDP 5.0 7.4 Remittances of Egyptians working abroad/GDP 5.1 7.4 - Current account/GDP -5.9 -6.6 - Current receipts/GDP 15.5 24.0 - Current payments/GDP 21.4 30.6 - Current receipts/Current payments 72.4 78.3 Capital and Financial Account: - Net FDI in Egypt/GDP 2.1 3.4 - Overall Balance/GDP -0.8 5.8

Months of merchandise and service imports covered by NIRs (end of June) 3.1 5.6

*Provisional 3/4/1/1- Current Account

The current account deficit shrank by 21.5 percent to only US$ 15.6 billion (against US$ 19.8 billion). It is worth mentioning that the deficit narrowed by 13.1 percent in Oct./Dec. 2016 (the period in which the exchange rate was liberalized), by 37.7 percent in Jan./March 2017, and by 50.0 percent in April/June 2017. However, it recorded a rise of 24.3 percent in July/Sept. 2016 before the exchange rate liberalization.

Hereunder is a detailed review of the current account in FY 2016/2017, with a special focus on the main developments that took place in April/June 2017.

53


First- Trade Balance

The trade deficit narrowed by 8.4 percent to only US$ 35.4 billion (against US$

38.7 billion), due to both the rise in export proceeds by US$ 3.0 billion; and the decrease in import payments by US$ 265.6 million.

Export proceeds grew by 15.9 percent to US$ 21.7 billion (against US$ 18.7

billion). This was attributable to the increase in the proceeds of both non-oil and oil exports. The former rose by 16.2 percent to US$ 15.1 billion (against US$ 13.0 billion) due to the improved competitive advantage of the Egyptian exports following the exchange rate liberalization. The latter increased by 15.4 percent to US$ 6.5 billion (against US$ 5.7 billion).

Meanwhile, import payments declined by 0.5 percent to US$ 57.1 billion (against

US$ 57.4 billion), reflecting a decline in non-oil imports by 4.5 percent to US$ 45.9 billion (against US$ 48.1 billion), and a rise in oil imports by US$ 1.9 billion.

Against this background, the coverage ratio of merchandise exports to merchandise imports went up to 38.0 percent (from 32.6 percent). This will be thoroughly illustrated hereafter in the commodity structure of foreign trade.

12-10-

8-6-4-2-0246

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015/2016 2016/2017

US$ bn Main Items of Current Account

Trade Balance Services Balance Investment Income Balance Net Current Transfers

20.0-

15.0-

10.0-

5.0-

0.0

5.0

10.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015/2016 2016/2017

US$ bnTrade Balance

Exports Imports Trade Balance


Second- Services Balance

During the reporting year, the services surplus widened by 4.3 percent to US$ 6.8 billion (against US$ 6.5 billion) as the increase in services receipts outpaced that in services payments as follows:

A –Services Receipts

Services receipts increased by 3.2 percent to US$ 16.6 billion, (against US$ 16.1 billion). This came as a result of the following developments:

- Travel receipts (tourism revenues) climbed by 16.2 percent, to US$ 4.4

billion, (against US$ 3.8 billion), mainly reflecting the increase in the average spending per tourist a night. It is worth mentioning that tourism revenues increased by 128.3 percent and 201.5 percent in Jan./March and April/June 2017, respectively, compared with the same periods a year earlier, after registering a decline of 56.1 percent and 15.8 percent in July/Sept. and Oct./Dec. 2016, respectively, as compared with the same periods a year earlier.

- Government receipts accelerated by 105.4 percent to US$ 776.4 million,

(against US$ 378.0 million), due to the rise in the receipts of the expenses of the League of Arab States and other international institutions.

- Transportation receipts decreased by 4.5 percent to only US$ 9.1 billion

(against US$ 9.5 billion). This was ascribed to the fall in the Suez Canal receipts by 3.4 percent to US$ 4.9 billion (against US$ 5.1 billion), because of the depreciation of SDR against the US dollar by 1.9 percent on average in FY 2016/17 compared with the previous FY, notwithstanding the higher net tonnage of transiting vessels by 0.8 percent. Another factor that added to the decline in transportation receipts was the retreat in the receipts of Egyptian aviation and navigation companies.

4.0-3.0-2.0-1.0-0.01.02.03.04.05.06.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015/2016 2016/2017

US$ bn Services Balance

Services Receipts Services Payments Services Balance

55


- The receipts of other services fell by 2.8 percent to US$ 2.3 billion (against US$ 2.4 billion), due to a fall in the receipts of communications services, agencies' commissions and expenses, and insurance services.

B- Services payments

During the reporting year, services payments rose by 2.5 percent to US$ 9.8

billion (against US$ 9.5 billion), due to the following developments:

- Other services payments accelerated by 37.5 percent to US$ 4.6 billion (against US$ 3.3 billion), reflecting the rise in the amounts transferred abroad by foreign oil companies; other services payments; computer services; subscriptions for magazines and journals; and communications services.

- Government expenses surged by 44.7 percent to US$ 1.1 billion (against US$

777.1 million), due to the rise in other government expenses.

- Travel payments fell by 33.0 percent to US$ 2.7 billion (against US$ 4.1 billion) due to the decline in e-card payments abroad to only US$ 1.6 billion (against US$ 2.5 billion), as well as the fall in the expenses of pilgrimage and Umrah.

It is worth noting that travel payments markedly declined by 53.3 percent to only US$ 550.2 million (against US$ 1.2 billion) in April/June 2017, due to the fall in e-card payments abroad by 70.7 percent to US$ 226.9 million (against US$ 774.6 million).

- Transportation payments fell by 0.5 percent to US$ 1.33 billion (against US$

1.34 billion), mirroring the drop in the amounts transferred as transportation services and those transferred for repairing airplanes and ships at foreign airports and ports.

-10.0-8.0-6.0-4.0-2.00.02.0

100.0-50.0-

0.050.0

100.0150.0200.0250.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2016/2015 2017/2016

%Change Rates of Main Items of Services Receipts

Travel Receipts (Left Axis) Suez Canal Receipts (Right Axis)

%


Third – Investment Income Balance

Investment income balance ran a deficit of US$ 4.4 billion (against US$ 4.5 billion), due mainly to the fact that investment income payments recorded US$ 4.92 billion (against US$ 4.87 billion), as profit transfers of foreign companies operating in Egypt (petroleum & non-petroleum) constituted 64.3 percent of these payments. Meanwhile, investment income receipts recorded only US$ 497.9 million (against US$ 396.9 million).

Fourth – Unrequited Current Transfers

Net unrequited current transfers rose during the reporting year by 4.1 percent to US$ 17.5 billion (against US$ 16.8 billion), due to the following increases:

- Net private transfers to US$ 17.3 billion (against US$ 16.7 billion) due to the rise in remittances of Egyptians working abroad by 2.2 percent.

8.2

-0.3 -0.4 -0.9

7.8

1.6

-0.3

-2.3-4.0-2.00.02.04.06.08.0

10.0

Transportation Balance Travel Balance Government Receipts andPayments Balance

Other Receipts andPayments Balance

US$ bn Development ( Surplus / Deficit ) of Services Balances

2015/2016 2016/2017

0.1 0.1 0.1 0.1 0.1 0.1 0.10.2

-1.2 -1.4 -0.8 -1.5 -1.2 -1.2 -1.1 -1.4

-1.1-1.3

-0.7

-1.4

-1.1 -1.1-1.0

-1.2-1.6-1.4-1.2-1.0-0.8-0.6-0.4-0.20.00.20.4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015/2016 2016/2017

US$ bn

Investment Income Balance

Investment Income Receipts Investment Income Payments Investment Income Balance

57


It is worth noting that the period Nov./June 2016/2017 - which followed the decision of exchange rate liberalization - witnessed a rise in the remittances of Egyptians working abroad by US$ 1.4 billion to US$ 12.8 billion (from US$ 11.4 billion in the same period a year earlier).

- Official transfers (net) to US$ 149.0 million (against US$ 101.5 million). 3/4/1/2- Capital and Financial Account

Over FY 2016/2017, the capital and financial account showed a growing international confidence in the Egyptian economy, especially after launching the economic reforms, mainly the liberalization of the LE exchange rate. It achieved a net inflow of US$ 29.0 billion (against US$ 21.2 billion), as a confluence of the following developments:

1- The total inflow of FDI in Egypt in the reporting year scaled up by 6.5

percent, to US$ 13.3 billion (from US$ 12.5 billion). Meanwhile, the total outflow registered US$ 5.4 billion (against US$ 5.6 billion). Hence, the net inflow of FDI in Egypt mounted to US$ 7.9 billion (from US$ 6.9 billion). This was mainly a result of the hike in the net inflow of oil sector investments by US$ 2.3 billion to US$ 4.0 billion (from US$ 1.7 billion).

1.3 1.2 1.2 1.3 1.4

2.0 2.0 2.1

0.0

0.5

1.0

1.5

2.0

2.5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015/2016 2016/2017

%Egyptian Workers' Remittances as a Percentage of GDP


The following table shows the sectoral distribution of total FDI inflows to Egypt:

(US$ mn)

Activity Sector FY

2015/2016* Share (%)

2016/2017* Share (%)

Total FDI Inflows to Egypt 12528.7 100.0 13349.1 100.0 1- Oil 6710.7 53.5 8174.6 61.2 2- Manufacturing 423.2 3.4 776.4 5.8 3- Agriculture 0.7 0.0 21.3 0.2 4- Construction 186.8 1.5 120.8 0.9 5- Services, of which 1299.6 10.4 1261.1 9.5

- Real Estate 459.4 3.6 420.1 3.1 - Finance 474.8 3.8 221.2 1.7 - Tourism 33.9 0.3 50.7 0.4 - Communications & IT 58.0 0.5 38.8 0.3 - Other services 273.5 2.2 530.3 4.0

6- Undistributed 3907.7 31.2 2994.9 22.4 * Preliminary.

2- Portfolio investment in Egypt achieved a net inflow of US$ 16.0 billion in the reporting year (against a net ouflow of US$ 1.3 billion). This was primarily due to the rise in foreigners' investments in Egyptian TBs recording net purchases of US$ 10.0 billion. Moreover, the Egyptian authorities issued bonds abroad during the period that followed the liberalization of the exchange rate, where foreigners' investments amounted to US$ 6.8 billion. In addition, foreigners' investments on EGX moved up to register net purchases of US$ 497.3 million (against US$ 157.1 million).

0

2

4

6

8

10

Net FDI in Egypt Net GreenfieldInvestment

Transfers for buying realestates in Egypt by non-

residents

Net petro leum sectorinvestments

Proceeds from sellinglocal entities to non-

residents

US$ bn

Net FDI in Egypt

2015/2016

2016/2017

59


3- Medium- and long-term loans and facilities unfolded net disbursements of US$ 5.6 billion (against US$ 1.3 billion).

4- Other assets and liabilities posted a net outflow of US$ 2.5 billion (against a net inflow of US$ 8.5 billion). This was ascribed to the increase in foreign assets at banks and the availability of foreign currency resources after the liberalization of exchange rate. The increase in banks' assets amounted to US$ 9.5 billion, whereas their obligations rose only by US$ 1.4 billion.

3/4/2- Foreign Trade

In FY 2016/2017, the total volume of Egypt's foreign trade increased to US$ 78.8 billion (or 33.5 percent of GDP according to the Trade Openness Indicator), against US$ 76.1 billion in the previous FY. This was an outcome of the rise in merchandise exports proceeds by US$ 3.0 billion to US$ 21.7 billion, and the decline in merchandise imports payments by US$ 265.6 million to US$ 57.1 billion. 3/4/2/1- Merchandise and Sectoral Distribution of Exports by Degree of Processing

Merchandise exports (oil and non-oil) grew by 15.9 percent to US$ 21.7 billion (9.2 percent of GDP), against US$ 18.7 billion. This was mainly due to the rise in both non-oil exports by US$ 2.1 billion and oil exports by US$ 874.0 million.

4.0-

2.0-

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Net Portfolio Investment in Egypt Net Foreigners' Transactions inTreasury Bills

Net Foreigners' Transactions inBonds

Net Foreigners' Transactions inShares on EGX

US$ bn

Net Portfolio Investment in Egypt

2015/2016

2016/2017

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015/2016 2016/2017

US$ bn

Oil & Non Oil ExportsFiscal Year

Non Oil Exports Oil Exports


Hereunder is a detailed review of oil and non-oil export proceeds: 1- Oil Export Proceeds (30.2 percent of total exports):

In FY 2016/2017, oil export proceeds scaled up by 15.4 percent to US$ 6.6 billion (from US$ 5.7 billion in the previous FY). This was owed to the increase in exports of both oil products* by US$ 592.5 million to US$ 2.7 billion, and crude oil by US$ 281.5 million to US$ 3.8 billion (due to the hike in the average prices of oil products, natural gas, and crude oil as well as the exported quantities of oil products and natural gas).

As regards the sectoral breakdown of oil exports in the year under review, the

shares of public, private, and investment sectors were close. The private sector contributed 35.3 percent (represented mainly in crude oil), the public sector 32.9 percent (mainly in crude oil), and the investment sector 31.8 percent (mainly in oil products).

2- Non-oil Export Proceeds (69.8 percent of total exports): The non-oil export proceeds increased by 16.2 percent to US$ 15.1 billion (against US$ 13.0 billion in the previous FY). This was traceable to the higher export proceeds of semi-finished goods by 46.2 percent, finished goods by 7.1 percent, and raw materials by 7.0 percent. A- Semi-Finished Goods

Exports of semi-finished goods rose by 46.2 percent to US$ 4.0 billion, thanks to the rise in the exports of some goods, mainly gold by US$ 715.4 million and cast iron by US$ 261.1 million.

B- Finished Goods

Exports of finished goods increased by 7.1 percent to US$ 9.3 billion, reflecting higher exports of some goods, mainly phosphate and mineral fertilizers by US$ 246.2 million; glass and glassware by US$ 90.3 million; and communication and telephone appliances by US$ 86.3 million. ____________________ * Including natural gas & bunker and jet fuel.

Other Fuel, Mineral Oils & Products

1.4%

Raw Materials

10.9%

Semi -Finished Goods26.5%

Finished Goods61.2%

Relative Structure of Non Oil Exports by Degree of Processing in FY 2016/2017

61


C- Raw Materials

Exports of raw materials moved up by 7.0 percent to US$ 1.7 billion, due to higher exports of some goods, mainly fresh and dried fruits by US$ 125.0 million, and raw cotton by US$ 46.3 million.

As regards the sectoral breakdown

of non-oil exports in the reporting year, the private sector acquired the lion's share of these proceeds (88.0 percent). The investment sector accounted for only 9.6 percent and the public sector's share was no more than 2.4 percent.

3/4/2/2- Merchandise and Sectoral Distribution of Imports by Degree of Use

In FY 2016/2017, import payments inched down by 0.5 percent to register only US$ 57.1 billion or 24.3 percent of GDP (against US$ 57.4 billion in the previous FY). This came as an effect of the decline in non-oil imports by US$ 2.2 billion and the rise in oil imports by US$ 1.9 billion.

Hereunder is a detailed review of oil and non-oil import payments:

1- Oil Import Payments (19.6 percent of total imports):

Import payments of oil went up in the reporting year by 20.5 percent to US$ 11.2 billion, (from US$ 9.3 billion in the previous FY). This was due to the increase in import payments of both oil products by US$ 1.3 billion to US$ 9.6 billion and crude oil by US$ 642.8 million to US$ 1.6 billion (mirroring the high global prices of crude oil and oil products in addition to the pickup in the imports of crude oil and natural gas due to the increased demand for their use in the national projects under implementation).

* Including bunker and jet fuel and the imports of natural gas and butane.

The Private Sector

US$ 15.7 billion

Non-Oil Exports US$ 13.4

billion

Oil Exports US$ 2.3 billion

The

Investment Sector

US$ 3.5 billion


billion


Sectoral Distribution of Exports

( US$ 21.7 billion)

The Public Sector

US$ 2.5 billion


million


0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015/2016 2016/2017

US$ bnOil & Non Oil Imports

Fiscal Year

Non Oil Imports Oil Imports


As regards the sectoral breakdown of oil imports, the public sector imported 85.0 percent of total oil imports (mainly oil prodcuts). Meanwhile, the private sector accounted for 11.9 percent (mainly oil products), and the invetsment sector 3.1 percent (mainly crude oil).

2- Non-oil Import Payments (80.4 percent of total imports):

Non-oil import payments decreased by

4.5 percent to US$ 45.9 billion (from US$ 48.1 billion in the previous FY), mirroring the decline in imports of consumer goods by 13.7 percent and investment goods by 8.6 percent. However, the imports of raw materials and intermediate goods scaled up by 14.2 percent and 2.8 percent, respectively.

A- Consumer Goods Imports of this group went down by 13.7 percent to only US$ 12.6 billion, due to the following declines: - Durable consumer goods by 27.9 percent to US$ 2.8 billion, because of lower

imports of some goods, mainly passenger cars by US$ 649.2 million, and televisions and household electric appliances by US$ 385.3 million.

- Non-durable consumer goods by 8.7 percent to register only US$ 9.9 billion,

owing to lower imports of some goods, mainly ready-made clothes by US$ 269.8 million and meat preparations by US$ 265.3 million.

B- Investment Goods

Imports of investment goods dropped by 8.6 percent to US$ 8.8 billion, due to the decline in the imports of some goods, mainly communication and telephone appliances by US$ 642.8 million, and liquid and air pumps by US$ 212.0 million. C- Raw Materials

Imports of raw materials moved up by 14.2 percent to US$ 6.2 billion, due to higher imports of some goods, mainly wheat by US$ 453.6 million and iron ores by US$ 251.4 million.

Other Fuel, Mineral Oi ls &

Products

0.7%

Raw Materials13.5%

Intermediate Goods34.3%

Investment Goods19.2%

Consumer Goods27.5%

Undistributed Goods

4.8%

Relative Structure of Non Oil Imports by Degree of Use

in FY 2016/2017

63


D- Intermediate Goods

Imports of intermediate goods increased by 2.8 percent to US$ 15.7 billion, on the back of higher imports of some goods, mainly animal and vegetable fats, greases and oils by US$ 262.9 million; and hot or cold flat-rolled products by US$ 146.1 million.

As regards the sectoral breakdown

of non-oil imports during the reporting year, the private sector accounted for 71.8 percent of total non-oil imports. Meanwhile, the shares of the public and investment sectors were only 19.1 percent and 9.1 percent, in order.

3/4/2/3 – Foreign Trade by Geographical Distribution:

According to the geographical distribution of foreign trade and the main trade partners, Egypt's foreign trade with the USA increased by 22.0 percent, Australia and other countries & regions by 17.6 percent, Russian Federation and the Commonwealth of Independent States by 7.3 percent, the Arab countries by 7.0 percent, other European countries by 6.7 percent, and the non-Arab African countries by 6.6 percent. Meanwhile, Egypt's foreign trade with non-Arab Asian countries and the EU countries declined by 6.9 percent and 2.3 percent, respectively.

At the level of trade partners, the UAE came on top as the main trade partner

with Egypt (constituting 7.4 percent of total foreign trade), followed by the USA (6.0 percent), China (5.6 percent), Italy (5.2 percent), Saudi Arabia (4.8 percent), Germany (4.5 percent), the UK (4.0 percent), Russia (3.6 percent), Turkey (3.5 percent) and Switzerland (3.4 percent). These countries combined constituted 48.0 percent of total foreign trade.

The Private Sector

US$ 34.3 billion

Non-Oil Imports US$ 33.0 billion

Oil Imports

US$ 1.3 billion

Sectoral Distribution of Imports

)US$ 57.1 billion(

The Public Sector

US$ 18.3 billion

The Investment

Sector US$ 4.5 billion

Non-Oil Imports US$

8.8 billion

Oil Imports US$ 9.5 billion

Non-Oil Imports US$

4.2 billion

Oil Imports US$ 350.4

million

1.3

4.5

4.7

5.8

9.8

12.5

17.3

22.9

0 2 4 6 8 10 12 14 16 18 20 22 24

African Countries (Non-Arab)

Russian Federation & C.I.S

USA

Other European Countries

Australia & Other Countries & Regions

Asian Countries (Non-Arab)

Arab Countries

EU

US$ bn

Foreign Trade By Geographical Distribution

FY 2016/2017

64


- The geographical distribution of merchandise export proceeds shows that the

UAE was the key importer, followed by Italy, the USA, the UK, Saudi Arabia,

Turkey, Germany, Switzerland, Spain, and India, with a combined share of

60.0 percent of total export proceeds.

- The geographical distribution of import payments shows that China was the

key exporter, followed by the USA, the UAE, Saudi Arabia, Germany, Russia,

Italy, Switzerland, the UK, Turkey, France, and Qatar, with a combined share

of 52.0 percent of total imports.

Hereunder is a detailed review of foreign trade by economic groups in FY 2016/2017: A- EU Countries (29.0 percent of total foreign trade)

The trade deficit between Egypt and EU countries narrowed to only US$ 8.9

billion (against US$ 11.4 billion in the previous FY), as a result of the following developments:

- Export proceeds moved up by 16.3 percent to US$ 7.0 billion. Italy, the UK,

Germany, and Spain topped the list, in order.

- Import payments retreated by 8.8 percent to only US$ 15.9 billion. Germany

came first, followed by Italy, then the UK, and France.

B- Arab Countries (22.0 percent of total foreign trade)

The trade deficit between Egypt and Arab countries retreated to register only US$ 4.5 billion (against US$ 4.7 billion in the previous FY), due to the following factors:

- Export proceeds increased by 11.6 percent to US$ 6.4 billion. The UAE ranked

first, then Saudi Arabia, Lebanon, and Jordan, respectively.

- Likewise, the import payments moved up by 4.5 percent to US$ 10.9 billion.

The UAE topped the list, followed by Saudi Arabia, Qatar, and Kuwait, in

order.

C- Non-Arab Asian Countries (15.9 percent of total foreign trade)

The trade deficit between Egypt and Asian countries declined to only US$ 9.0 billion (against US$ 9.3 billion in the previous FY), as a confluence of the following developments:

- Exports to these countries retreated by 13.9 percent to only US$ 1.8 billion.

India ranked first then Hong Kong, South Korea, and Singapore, respectively.

- Imports from these countries dropped by 5.6 percent to US$ 10.8 billion. China

topped the list, followed by India, South Korea, and Hong Kong, in order.

65


D- Australia and Other Countries & Regions (12.4 percent of total foreign trade)

The trade deficit between Egypt and this group slightly increased by US$ 30.8 million to US$ 5.3 billion, due to the following factors:

- Exports to this group grew by 47.5 percent to US$ 2.2 billion. Canada came

first, followed by Brazil.

- Imports from this group scaled up by 11.0 percent, to US$ 7.5 billion. Brazil

was the main exporter, then Argentina.

E- Other European Countries (7.3 percent of total foreign trade)

The trade deficit between Egypt and this group decreased to record only US$ 2.3 billion (against US$ 2.7 billion in the previous FY) because of the following developments:

- Exports to these countries hiked by 29.5 percent to US$ 1.7 billion. Turkey

came first, followed by Switzerland.

- Imports from these countries inched down by 0.7 percent to US$ 4.0 billion.

Switzerland was the major exporter, followed by Turkey.

F- USA (6.0 percent of total foreign trade)

The trade deficit between Egypt and the USA narrowed to only US$ 1.1 billion (against US$ 1.3 billion in the previous FY) due to the following factors:

- Exports to the USA increased by 41.0 percent to US$ 1.8 billion (compared

with US$ 1.3 billion).

- Imports from the USA increased by 12.7 percent, to US$ 2.9 billion (compared

with US$ 2.6 billion).

G- Russian Federation and the Commonwealth of Independent States (5.7 percent of total foreign trade)

The trade deficit between Egypt and this group widened to US$ 4.1 billion (against US$ 3.7 billion in the previous FY), as a result of the following developments:

- Exports to this group declined by 12.9 percent to only US$ 212.7 million.

Russia came in the forefront, receiving 88.6 percent of the total.

- Imports from this group increased by 8.5 percent, to US$ 4.3 billion. Russia

accounted for 61.3 percent of total imports.

66


H- Non-Arab African Countries (1.7 percent of total foreign trade)

The trade deficit between Egypt and non-Arab African countries rose to US$ 267.6 million (against US$ 227.2 million in the previous FY), due to the following developments:

- Exports to these countries increased by 4.1 percent to US$ 529.0 million.

Kenya was the main importer, followed by Ethiopia, then South Africa.

- Imports from these countries moved up by 8.3 percent to US$ 796.6 million.

Nigeria took the lead, followed by Kenya, then Swaziland.

3/4/2/4 - Foreign Trade by Main Commodity and Merchandise Balances:

Breakdown of export proceeds by main commodity shows that exports of crude oil and products topped the list, with a share of 30.2 percent of total exports during the reporting year, followed by foodstuffs (excluding cereals) with 13.9 percent, then chemicals with 10.3 percent.

As for import payments, crude oil and products ranked first also, constituting 19.6

percent of total imports, followed by electric machinery, appliances and equipment (15.6 percent), chemicals (9.9 percent), and foodstuffs (excluding cereals) (9.8 percent).

Below is a detailed review of main merchandise balances:

1- Merchandise Balances with Improved Performance:

A- Vehicles, Cars and Other Means of Transportation

The merchandise balance of this group unfolded a deficit of US$ 2.6 billion (down by US$ 1.0 billion), as a confluence of the following developments:

-15

-10

-5

0

5

10

15

20

Oil Foodstuffs Cereals & millproducts

Textilematerials &

articles thereof

Chemicals Electricmachinery &equipment &parts thereof

Base metals &products

Vehicles, cars& other means

oftransportation

US$ bn

Foreign Trade by Merchandise Groups in FY 2016/2017

Exports Imports Volume of Trade

67


- Exports of this group rose by 5.2 percent to US$ 373.4 million (1.7 percent of total exports). The rise was traceable to the pickup in the exports of passenger vehicles.

- Imports of this group declined by 25.2 percent to only US$ 2.9 billion (5.1

percent of total imports) because of the decrease in the imports of passenger vehicles, and aircraft & spacecraft and parts thereof.

B- Base Metals and Products thereof

The merchandise balance of this group ran a deficit of US$ 2.2 billion (down by US$ 816.0 million), because of the following developments: - Exports of this group hiked by 51.2 percent to US$ 1.3 billion (6.0 percent of

total exports), mirroring the increase in the exports of iron & steel and their products; and aluminum & its articles.

- Imports of this group declined by 9.7 percent to merely US$ 3.5 billion (6.2

percent of total imports). This resulted from the fall in the imports of iron & steel and their products; tools, cutlery & tableware; and other products made of base metals.

C- Foodstuffs (excluding cereals)

The merchandise balance of this group ran a deficit of US$ 2.6 billion (down by US$ 699.7 million), due to the following factors: - Exports of this group rose by 10.6 percent to US$ 3.0 billion (13.9 percent of

total exports). This increase was attributed to higher exports of edible fruits and nuts; preparations of vegetables, fruits and nuts; and sugar and confectionaries.

- Imports of this group edged down by 6.9 percent to only US$ 5.6 billion (9.8

percent of total imports), owing to the drop in the imports of food industry residues; food preparations for animals; and edible fruits and nuts.

D- Chemicals

The merchandise balance of chemicals unfolded a deficit of US$ 3.4 billion (down by US$ 650.2 million), due to the following developments: - Exports of chemicals moved up by 26.2 percent to US$ 2.2 billion (10.3 percent

of total exports), supported by higher exports of fertilizers; organic and inorganic chemicals; and pharmaceuticals.

- Imports of chemicals dropped by 3.2 percent to only US$ 5.7 billion (9.9 percent

of total imports), due to lower imports of pharmaceuticals; and organic and inorganic chemicals.


E- Electric Machinery, Appliances and Equipment & Parts thereof

The merchandise balance of this group unfolded a deficit of US$ 7.0 billion (down by US$ 362.8 million), due to the decline in:

- Exports of this group by 6.9 percent to only US$ 1.9 billion (8.9 percent of total

exports), owing to lower exports of household electric-motor appliances; wires and cables; and electrical appliances for telephone (including intercom).

- Imports of this group by 5.4 percent to only US$ 8.9 billion (15.6 percent of total

imports), as a result of the drop in the imports of electrical appliances for telephone (including intercom); liquid and air pumps; and household electric-motor appliances.

F- Textiles and Products thereof

The merchandise balance of this group ran a deficit of US$ 462.5 million (down by US$ 103.7 million), owing to the increase in: - Exports of this group by 6.3 percent to US$ 2.0 billion (9.0 percent of total

exports), thanks to higher exports of cotton textiles and raw cotton. - Imports of this group slightly increased by 0.5 percent to US$ 2.4 billion (4.2

percent of total imports), as a result of higher imports of cotton yarn and raw cotton.

2- Merchandise Balances with No Improvement in Performance:

A- Crude Oil and Products thereof

The merchandise balance of this group ran a deficit of US$ 4.6 billion (up by US$ 1.0 billion), as a result of the increase in both oil imports by US$ 1.9 billion and exports by US$ 874.0 million.

B- Cereals and Mill Products

The merchandise balance of cereals and mill products ran a deficit of US$ 4.5 billion (up by US$ 656.6 million), on the back of the following developments:

- Exports of this group declined by 16.5 percent to only US$ 224.0 million (1.0

percent of total exports), due to lower exports of wheat and rice. - Imports of this group rose by 14.8 percent to US$ 4.7 billion (8.3 percent of total

imports), in response to the higher imports of wheat.

69


3/5- Non-Banking Financial Services Sector* 3/5/1- Stock Market

Regarding the performance of the Egyptian Exchange (EGX) in FY 2016/2017, marked increases were seen in most of its indices. To elaborate, its benchmark index (EGX 30) rose by 93.0 percent to 13395.8 points at end of June 2017, against 6942.5 points at end of June 2016. EGX 20 Capped increased by 76.7 percent to 12326.0 points against 6977.4 points at end of June 2016. EGX 50 EWI, which includes the top 50 companies in terms of liquidity and activity, also picked up by 64.8 percent to 2076.3 points against 1259.9 points. Moreover, EGX 70 and EGX 100 went up by 85.0 percent and 102.9 percent, in order, to 649.4 points and 1509.2 points (against 351.0 points and 743.7 points). Meanwhile, NILEX index- which reflects the performance of small and medium-sized enterprises listed on Nile Stock Exchange- declined by 19.2 percent to 510.1 points at end of June 2017 against 631.6 points at end of June 2016.

Concerning the primary market, the number of new issues approved by EFSA in FY 2016/2017 reached 4411, with a total value of LE 78.6 billion (against 4083 issues, totaling LE 97.9 billion in the previous FY). Of this figure, issues for new businesses reached 3280 in number (74.4 percent of total issues), at a value of LE 19.0 billion. In addition, the number of issues for capital increases of existing companies stood at 1131, totaling LE 59.6 billion (75.8 percent of the total value of issues).

The listing activity on the EGX showed that the number of listed companies

reached 222 at end of June 2017 (the same number at end of June 2016). Moreover, the nominal value of these companies' shares amounted to LE 213.3 billion (against

* Source: EFSA and EGX's monthly reports.

0

2000

4000

6000

8000

10000

12000

14000

Point The Benchmark EGX 30 Index


LE 188.8 billion at end of June 2016), up by 12.9 percent. In addition, their market capitalization rose by 79.7 percent to LE 687.4 billion at end of June 2017 (or 19.8 percent of GDP in FY 2016/2017), against LE 382.5 billion at end of June 2016. This rise reflected the pickup in the prices of most shares traded on the EGX.

On the other hand, the value of issued and listed bonds declined by LE 39.3

billion or 5.2 percent in FY 2016/2017, to LE 717.4 billion at end of June 2017 against LE 756.7 billion at end of June 2016. This decline stemmed from the fall of LE 35.8 billion in the value of Egyptian treasury bonds (primary dealers), to LE 709.2 billion or 98.9 percent of the total value of listed bonds at end of June 2017. Add to this the redemption of legal entities' bonds -that were listed on the EGX in December 2010 and delisted in July 2016- in an amount of LE 5.0 billion, the decline in securitization bonds by LE 0.1 billion, and the rise in corporate bonds by LE 1.6 billion.

Trading in the secondary market (including NILEX) in 2016/2017 showed that

the number of traded securities increased by 17.7 billion papers or 30.3 percent compared with the preceding year, to 76.0 billion. Also, the value of traded securities went up by LE 83.9 billion or 33.8 percent, reaching LE 332.3 billion (LE 305.2 billion of which were the value of listed shares, bonds and mutual funds' certificates). Likewise, the number of transactions increased by 1.5 million or 28.1 percent, compared with the previous FY, to 6.8 million.

Trading in shares on the EGX increased to 87.0 percent of the total value of

transactions during the reporting year (against 59.9 percent in the previous FY). However, trading in bonds went down to 12.2 percent of the total (against 39.3 percent), and trading in mutual funds' certificates remained unchanged at 0.8 percent of total value of transactions.

Turning to the market of small and medium enterprises (NILEX), the number

of listed companies reached 32 at end of June 2017 (the same number at end of June 2016). In FY 2016/2017, the number of traded securities in NILEX reached 684.0 million papers, executed through 116 thousand transactions, with a value of some LE 1.0 billion. Meanwhile, the market capitalization of their shares reached LE 1.1 billion at end of June 2017, compared with LE 1.2 billion at end of June 2016.

As for Exchange Traded Funds (ETFs) which track EGX 30 index, the number

of their traded securities reached 11.0 million papers, with a total value of LE 125 million in FY 2016/2017.

71


Trading in Securities

During FY 2013/2014 2014/2015 2015/2016 2016/2017 No. of Transactions (000s)

6810 5779 5296 6783

A- Shares, bonds and mutual funds' certificates (listed) 6606 5660 5164 6637

B- Shares, bonds and mutual funds' certificates (unlisted) 55 36 30 30

C- Small and medium enterprises market (NILEX) 149 83 102 116

No. of Traded Securities (mn) 51747 39967 58363 76036 A- Shares, bonds and mutual funds'

certificates (listed) 49583 38184 55978 73854 B- Shares, bonds and mutual funds'

certificates (unlisted) 1809 1493 1965 1498 C- Small and medium enterprises market

(NILEX) 355 290 420 684 Value of Transactions (LE mn) 250031 249965 248407 332292 A- Shares, bonds and mutual funds'

certificates (listed) 224875 233784 226409 305219 B- Shares, bonds and mutual funds'

certificates (unlisted) 24020 15621 21290 26119 C- Small and medium enterprises market

(NILEX) 1136 560 708 954 Source: EFSA and EGX's monthly reports

Foreigners' transactions on the EGX* (purchases and sales) noticeably surged

by 119.9 percent in FY 2016/2017, to LE 150.1 billion (against LE 68.2 billion in the previous FY). Their dealings resulted in net purchases of LE 8.8 billion (against LE 1.4 billion in the previous fiscal year).

Egyptians' trading on the EGX accounted for 70.6 percent of total transactions in

FY 2016/2017. On the other hand, dealings of foreign investors represented 29.4 percent of the total.

* This statement does not include transactions of "primary dealers".

0

10

20

30

40

50

60

70

80

90

2015/2016 2016/2017

Foreign Investors' Transactions during FY

Purchases

Sales

Net

LE bn

Annex

Statistical Section


Statistical Section (1) Central Bank of Egypt (1/1) Financial Position: Reserve Money and Counterpart Assets (1/2) Banknote Issued by Denomination (1/3) Transactions via RTGS and SWIFT (2) Monetary Developments (2/1) Banking Survey: Domestic Liquidity and Counterpart Assets (2/2) Banking Survey: Deposits in Local Currency (2/3) Banking Survey: Deposits in Foreign Currencies (2/4) Banking Survey: Foreign Assets and Liabilities (2/5) Banking Survey: Domestic Credit and Other Items (Net) (2/6) Total Saving Vessels (3) Domestic and External Debt (3/1) Gross Domestic Debt (3/2) NIB Resources & Uses (3/3) External Debt Structure (3/4) Distribution of External Debt by Main Currencies (3/5) External Debt by Creditor (4) Banking System (4/1) Structure of the Egyptian Banking System (4/2) Representative Offices of Foreign Banks Registered with the CBE

(End of June 2017)

(5) Banks (5/1) Aggregate Financial Position (5/2) Deposits by Maturity (5/3) Deposits by Sector (5/4) Lending and Discount Balances by Sector


(6) Domestic Economic Indicators (6/1) GDP at Factor Cost by Economic Sector at 2011/2012 Prices (6/2) GDP by Expenditure at 2011/2012 Prices (6/3) Consumer Price Index (Urban Population) (6/4) Producer Price Index (PPI) (7) Public Finance (7/1) Summary of Consolidated Fiscal Operations of the Budget Sector (8) External Transactions (8/1) Balance of Payments (8/2) Average Exchange Rates (In LE per Foreign Currency Unit) (9) Financial Market Developments (9/1) Trading in Shares on the Egyptian Exchange (9/2) Trading in Bonds and Mutual Funds' Certificates on the Egyptian

Exchange

(9/3) Foreigners' Transactions on the Egyptian Exchange

End of June 2011 2012 2013 2014 2015 2016 2017

Reserve Money 250992 263668 317944 364473 485876 478076 577582

Currency in circulation outside CBE * 179096 204870 260849 288651 313468 368459 452035

Banks' deposits in local currency at CBE 71896 58798 57095 75822 172408++ 109617 125547

Counterpart Assets 250992 263668 317944 364473 485876 478076 577582

Net Foreign Assets 147197 76059 38235 37395 25278 -44863 3690

Foreign Assets 156331 92169 101685 115770 148098 149943 551514

Gold 16343 19979 17239 18983 18195 22820 46910

Foreign securities 114608 51524 34163 61506 104523 32795 225711

Foreign currencies 25380 20666 50283 35281 25380 94328 278893

Foreign Liabilities 9134 16110 63450 78375 122820 194806 547824

Net Domestic Assets 103795 187609 279709 327078 460598 522939 573892

Net Claims on Government+ 102562 165374 299806 419218 523893 619410 708637

Claims; of which: 189621 256605 404837 463724 620003 706885 821975

Government securities 130597 178831 238831 240331 240330 390830 714454

Deposits 87059 91231 105031 44506 96110 87475 113338

Net Claims on Banks 147 -2706 -5811 -9045 -26334 59621 157141

Claims 23496 22296 27259 25265 25017 120432 286855

Deposits in foreign currencies 23349 25002 33070 34310 51351 60811 129714

Other Items (Net) 1086 24941 -14286 -83095 -36961++ -156092 -291886

+ Including public economic authorities and the NIB.

++ Under open- market operations, the deposit acceptance session scheduled on 30 June 2015 was cancelled, and substitute session was held on Thursday 2/7/2015.

Source : Central Bank of Egypt.

* Including subsidiary coins issued by the Ministry of Finance.

(1/1) CBE Financial Position: Reserve Money and Counterpart Assets

(LE mn)

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017 1

End of June 2011 2012 2013 2014 2015 2016 2017

Total 180118 207824 264505 290283 315313 369757 453529

Banknote Issued by Denomination + 179794 207473 264128 289875 314885 369321 453081

PT 25 161 147 143 146 159 166 170

PT 50 303 296 293 316 355 365 407

LE 1 909 890 913 945 969 1029 1238

LE 5 2738 1944 1902 1833 1828 2431 3080

LE 10 2983 2940 3192 3516 3504 3089 3815

LE 20 9950 7809 6654 6809 6749 6093 6899

LE 50 22350 21720 25017 25279 30767 29115 28434

LE 100 73444 83606 107212 115749 114574 132481 159390

LE 200 66956 88121 118802 135282 155980 194552 249648

Subsidiary Coins* 324 351 377 408 428 436 448


+ Including coin denominations of 25,50, and 100 piasters.

* Issued by the Ministry of Finance.

2Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

( LE mn )

(1/2) CBE: Banknote Issued by Denomination

During FY 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017

Local Currency Transactions via RTGS*

1- Automated Clearing House (ACH)

Number of transactions (thousand) 13012 12829 13266 12886 13439 13500 12449

Value of transactions (LE bn) 627 661 728 789 966 1047 1249

2- Other Transactions via RTGS**

Number of transactions (in unit) 1248692 1298763 1230197 1034549 1021058 1074548 1197635

Value of transactions (LE bn) 15880 9402 12294 16421 22587 29709 33349

Foreign Currency Transfers (Dollar Interbank Transactions)

via the Fin-Copy System***

Number of transactions (in unit) 15066 14080 9885 4842 5482 3399 8367

Value of transactions (US$ mn) 88052 62321 34523 8468 7597 9257 6916


* The RTGS was launched on 15 /3/ 2009.

** Including corridor operations and deposits for monetary policy purposes as of 15/3/2009.

*** This service was introduced on 19/ 9/ 2004.

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17 3

(1/3) CBE: Transactions via RTGS and SWIFT

End of June 2011 2012 2013 2014 2015* 2016 2017

First : Domestic Liquidity 1009411 1094408 1296086 1516601 1765492 2094500 2918193

a - Money Supply 248707 274510 344100 410554 499065 572935 707427

Currency in circulation outside the banking system 167887 194027 241011 270856 292699 346853 419058

Demand deposits in local currency 80820 80483 103089 139698 206366 226082 288369

b - Quasi-Money 760704 819898 951986 1106047 1266427 1521565 2210766

Time & saving deposits in local currency 583732 633858 727778 869976 1003432 1197746 1516480

Demand and time & saving deposits in foreign currencies 176972 186040 224208 236071 262995 323819 694286

Second : Counterpart Assets

Net foreign assets 253500 157624 123198 119162 51487 -87389 61056

Domestic credit 892766 1072566 1343140 1625141 1978211 2460115 3111270

Other items (net) -136855 -135782 -170252 -227702 -264206 -278226 -254133


4Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

* As of March 2015, data of Arab International Bank were added to the banking survey, thereby affecting the related tables.

(2/1) Banking Survey : Domestic Liquidity and Counterpart Assets

( LE mn )

End of June 2011 2012 2013 2014 2015 2016 2017

Total Deposits in Local Currency 664552 714341 830867 1009674 1209798 1423828 1804849

First : Demand Deposits 80820 80483 103089 139698 206366 226082 288369

Public business sector * 6670 7363 6825 8523 16050 20628 24154

Private business sector 43324 39083 55804 76384 123964 129896 152851

Household sector 31645 34944 41401 55560 67133 76924 112974

Minus: Purchased cheques & drafts 819 907 941 769 781 1366 1610

Second : Time and Saving Deposits 583732 633858 727778 869976 1003432 1197746 1516480





* Including all public sector companies subject or not to Law No. 203 for 1991.

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17 5

(2/2) Banking Survey : Deposits in Local Currency

( LE mn )

End of June 2011 2012 2013 2014 2015 2016 2017

Total Deposits in Foreign Currencies 176972 186040 224208 236071 262995 323819 694286

First : Demand Deposits 41298 44965 55152 62214 68631 75910 150042




Minus: Purchased cheques & drafts 66 127 80 64 31 29 80

Second : Time and Saving Deposits 135674 141075 169056 173857 194364 247909 544244






Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

6

(2/3) Banking Survey : Deposits in Foreign Currencies

( LE mn )

End of June 2011 2012 2013 2014 2015 2016 2017

Net Foreign Assets 253500 157624 123198 119162 51487 -87389 61056

First : Foreign Assets 295480 206965 220039 231608 234312 231475 890640

Central Bank of Egypt 156331 92169 101685 115770 148098 149943 551514

Banks 139149 114796 118354 115838 86214 81532 339126

Second : Foreign Liabilities 41980 49341 96841 112446 182825 318864 829584

Central Bank of Egypt 9134 16110 63450 78375 122820 194806 547824

Banks 32846 33231 33391 34071 60005 124058 281760


(2/4) Banking Survey : Foreign Assets and Liabilities

( LE mn )

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17 7

End of June 2011 2012 2013 2014 2015 2016 2017

First : Domestic Credit 892766 1072566 1343140 1625141 1978211 2460115 3111270

Net claims on the government (A+B-C) 437337 578654 802539 1045186 1291427 1654910 1979641

A- Securities 542792 677139 832770 1004342 1193595 1614650 2155163

B- Credit facilities 98826 111362 201787 264196 446094 489795 462244

C- Government deposits 204281 209847 232018 223352 348262 449535 637766

Claims on public business sector * 32981 40620 42866 45417 63218 93073 148715

Claims on private business sector 323241 340865 369814 389275 448276 504258 744572

Claims on household sector 99207 112427 127921 145263 175290 207874 238342

Second : Other Items (Net) -136855 -135782 -170252 -227702 -264206 -278226 -254133

Capital accounts -146543 -168778 -200057 -233369 -263117 -305204 -495952

Net unclassified assets and liabilities 9688 32996 29805 5667 -1089 26978 241819

(Including interbank debit and credit position(net))



8Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

(2/5) Banking Survey : Domestic Credit and Other Items (Net)

( LE mn )

End of June 2011 2012 2013 2014 2015 2016 2017

Total Saving Vessels 955163 1028953 1178318 1360870 1544783 1849555 2564061

Savings at the Banking System 760704 819898 951986 1106047 1266427 1521565 2210766

Time & saving deposits in local currency 583732 633858 727778 869976 1003432 1197746 1516480

Demand and time & saving deposits in foreign currencies 176972 186040 224208 236071 262995 323819 694286

Net Sales of Investment Certificates 94428 97745 102159 108378 108875 139771 155897

Post Office Saving Deposits 100031 111310 124173 146445 169481 188219 197398


Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17 9

(2/6) Total Saving Vessels

( LE mn )

( LE mn )

End of June 2012 2013 2014 2015 2016 2017

Gross Domestic Debt (1+2+3-4) 1238137 1527378 1816582 2116345 2620662 3160864

1- Net Domestic Debt of Government (A+B+C+D+E) 990529 1261141 1538459 1871332 2285644 2685898

A- Balances of Bonds & Bills 1078162 1269289 1478846 1722165 2290527 3024480

Treasury Bonds : 669554 786024 944176 1125969 1474532 1838777

Treasury bonds with the CBE 178830 238830 240330 240330 390830 642330

Local currency bonds with public sector banks 4000 0 0 0 0 0

US dollar bonds issued for commercial banks 0 0 21390 22560 26310 67615

Bonds offered abroad *:

US$ 3834 5539 6166 6108 8832 18309

LE 4279 0 0 0 0 0

Egyptian treasury bonds ** 270567 315478 436510 596940 745005 710960

International euro bonds ( private placment for the account of CBE) *** 0 0 0 0 0 72123

Government notes to compensate for the actuarial deficit in social insurance funds 2000 2000 2000 2000 2000 2000

Housing bonds 111 106 101 92 62 46

The equivalent of the retained 5% of corporate profits to purchase government bonds 1905 1998 2051 2124 2199 2270

Bonds of the Insurance Funds (against the transfer of NIB debt to the Treasury) 204028 219507 233704 254532 298653 323124

Bonds of Barwa Real Estate Investment Company. 0 2566 1924 1283 641 0

Treasury Bills : 408608 483265 534670 596196 815995 1185703

LE 373398 425847 471521 531543 656740 858004

US$ 35210 46914 51166 53307 145576 300218

Euro 0 10504 11983 11346 13679 27481B- Borrowing from other entities 13036 25348 15686 5640 0 0C - Credit Facilities from the Social Insurance Funds 1725 1225 1225 450 250 250D - The Masri Dollar certificate**** 193 1421 2256 2207 1125 248E- Net Government Balances with the Banking System -102587 -36142 40446 140870 -6258 -3390802- Borrowing of Public Economic Authorities (Net) 63112 63256 58360 11341 103720 222329 Net Balances of Public Economic Authorities with the Banking System 10457 11943 6331 -41524 52171 170713 Borrowing of Public Economic Authorities from NIB ***** 52655 51313 52029 52865 51549 516163- NIB Debt (Net) 251028 266595 280946 293902 309591 336934 NIB Debt 253679 268388 282674 295339 315201 344080 Deposits of the NIB with the banking system (-) 2651 1793 1728 1437 5610 7146 4- Intra-debt 66532 63614 61183 60230 78293 84297 Government debt to the NIB (investments in government securities) 13877 12301 9154 7365 26744 32681 Loans of Public economic authorities to NIB 52655 51313 52029 52865 51549 51616Source: Central Bank of Egypt - Ministry of Finance - National Investment Bank.

* Represents holdings of financial institutions ( the banking and insurance sectors ) resident in Egypt. ** Based on its nominal value. *** This item represents the local equivalent of the international euro bonds issued in November 2016. **** In order to support the national economy and finance the development plan, the National Bank of Egypt issued a US dollar certificate in May 2012 for Egyptians resident abroad to invest their savings in the Egyptian market. The Masri Dollar Certificate is a three-year certificate, with a 4% annual return, and is not redeemable in the first six months. Its minimum purchase value is US$ 1000, with no ceiling. ***** Apart from the interest payments due to the NIB.

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017

10(3/1) Gross Domestic Debt

( LE mn )

Liabilities :of which 253679 268388 282674 295339 315201 344080

Social Insurance Fund for Gov. Employees 34999 38499 40580 41524 32264 33407

Social Insurance Fund for Pub. & Priv. Business Sectors Employees 29765 30249 31441 32757 23637 22581

Proceeds from investment certificates 97904 102253 108451 108938 138265 155947

Accumulated interest on investment certificates (category A) 8005 7149 7240 7874 7994 7546

Proceeds of US dollar development bonds 7 6 5 5 4 4

Post office savings deposits 78852 86382 93376 102297 111044 122271

Others* 4147 3850 1581 1944 1993 2324

Assets :of which 253679 268388 282674 295339 315201 344080

Loans to Public economic authorities 52655 51313 52029 52865 51549 51616

Investments in government securities (bills and bonds) 13877 12301 9154 7365 26744 32681

Deposits of the NIB with the banking system 2651 1793 1728 1437 5610 7146

Lending to holding companies and affiliate units, concessional loans and others(Net NIB debt minus its intra-debt)

184496 202981 219763 233672 231298 252637

Source: Central Bank of Egypt - National Investment Bank.

* Including deposits of the private insurance funds, alternative insurance funds, saving certificates, and loans & deposits of various authorities.

11

20172016

(3/2) NIB Resources and Uses

2012 2013 2014 2015

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

01

6/2

01

7

End of June

(US$ mn)

2017 +20162015201420132012End of June

79032.855764.448062.946067.143233.434384.5Total External Debt*

4252.05249.66242.98440.59479.510983.3Rescheduled bilateral debt **

4015.04524.54637.25624.75915.16654.6 ODA

237.0725.11605.72815.83564.44328.7 Non-ODA

6572.46299.95491.76104.05982.25074.2Other bilateral debt

3710.83553.52200.93646.13589.13960.7 Paris Club countries

2861.6***2746.4***3290.82457.92393.11113.5 Other countries

21751.614089.912246.312228.611963.311068.1International & regional institutions

6505.23118.91546.5546.4586.4405.0Suppliers' & buyers' credits

8984.53493.04937.76085.35158.62900.7Egyptian bonds & notes

18537.416300.015000.09000.03000.01000.0Long-term deposits

155.3195.422.511.317.351.3Private sector debt (non-guaranteed)

12274.47017.72575.33651.07046.12901.9Short-term debt

3824.11478.31295.31392.55293.4913.7 Deposits

8450.35539.41280.02258.51752.71988.2 Other facilities

Source: External Debt Statistics Department- CBE.

+ Provisional

* The difference from World Bank Data is in short-term debt .

** According to the agreement signed with Paris Club countries on May 25, 1991.

*** Includes China facility agreement.

(3/3) External Debt Structure

Ce

ntra

l Ba

nk

of E

gy

pt- A

nn

ua

l Re

po

rt 20

16

/20

17

12

(US$ mn)

ChangeEnd of+/(-)%Value%Value

23268.4100.079032.8100.055764.4Total15152.869.955199.371.840046.5US dollar **

3087.312.69991.412.46904.1Euro

(289.4)2.92304.04.72593.4Japanese yen

3008.67.05543.14.52534.5SDRs

(48.9)3.02341.64.32390.5Kuwaiti dinar

(495.9)0.3235.91.3731.8Egyptain Pound

(63.7)0.2159.10.4222.8Swiss franc

327.80.6461.50.2133.7Saudi riyal

(7.6)0.154.60.162.2Danish krone

(9.9)0.036.70.146.6Canadian dollar

(5.2)0.029.00.134.2UAE dirham

(21.1)0.025.40.146.5Sterling pound

(0.2)0.02.00.02.2Norwegian krone

(4.1)0.02.50.06.6Swedish krona

2646.73.42646.70.00.0Chinese Yuan

(8.8)0.00.00.08.8Australian dollar

Source: External Debt Statistics Department- CBE.

* Provisional.

** Including other liabilities in US dollar. 13

(3/4) Distribution of External Debt by Main Currencies

June 2017*June 2016C

en

tral B

an

k o

f Eg

yp

t- An

nu

al R

ep

ort 2

01

6/2

01

7

14

(US$ mn)

Value Relative Importance Value Relative Importance

Total External Debt55764.4 100.0 79032.8 100.0

USA 2105.5 3.8 1561.6 2.0

Japan 2492.4 4.5 2217.1 2.8

EU Countries,of which 7023.1 12.6 12858.9 16.2

France 1406.4 2.5 1337.8 1.7

Germany 3814.4 6.8 6351.2 8.0

UK 446.8 0.8 3407.2 4.3

Spain 257.4 0.5 225.7 0.3

Italy 486.0 0.9 877.6 1.1

Austria 80.4 0.1 78.9 0.1

Denmark 132.1 0.2 113.1 0.1

The Netherlands 236.5 0.4 214.7 0.3

Belgium 42.7 0.1 156.8 0.2

Sweden 49.6 0.1 10.8 0.0

Arab Countries , of which 19379.6 34.8 22269.6 28.2

Kuwait 4947.3 8.9 5011.0 6.3

Saudi Arabia 5239.4 9.4 8193.1 10.4

United Arab Emirates 6467.0 11.6 7585.4 9.6

Libya 2041.3 3.7 1033.5 1.3

Qatar 204.9 0.4 51.8 0.1

Jordan 25.4 0.0 25.1 0.0

Palestine 42.1 0.1 29.1 0.0

Sudan 24.1 0.0 15.1 0.0

Other Countries 7180.9 12.8 9388.9 11.9

International and Regional Organizations, of which 14089.9 25.3 21752.2 27.5

International Monetary Fund 1254.1 2.2 3980.3 5.0

World Bank 5105.8 9.2 7510.9 9.5

African Development Fund and Bank 2230.4 4.0 2703.1 3.4

European Investment Bank 1669.1 3.0 2269.7 2.9

Arab Fund for Economic and Social Development 1472.2 2.6 1414.8 1.8

IDA 890.1 1.6 777.6 1.0

Islamic Development Bank (Jeddah) 320.1 0.6 504.8 0.6

AMF 519.2 0.9 877.9 1.1

Egyptian Bonds and Notes 3493.0 6.2 8984.5 11.4

* Provisional.

Central Bank of Egypt- Annual Report 2016/2017

(3/5)External Debt by Creditor

June 2016 June 2017*

End of June Number of Banks Operating in Egypt Number of Branches

2011 39 3573

2012 40* 3610

2013 40 3651

2014 38** 3710

2015 38 3766

2016 38 3882

2017 38 4009

as of 5/6/2012.

** The National Bank of Oman and The Bank of Nova Scotia obtained approvals to cease operations in Egypt in

December 2013 and March 2014, respectively.

* After including the Arab International Bank in the banks' record, and being under the supervision of the CBE


(4/1) Structure of the Egyptian Banking System

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017

15

NameRegistration

DateAddress

Al-Raghi Bank 20/10/1993 2 Aly Rashed St., Star Capital 2, 3rd

floor, Office 34, CityStars, Heliopolis, Cairo.

The Bank of New York Mellon 27/10/1993 Concordia Building No. B2111, Smart Village, Cairo-Alex.desert road, 6th of October,Giza.

Commerz Bank AG. 31/05/1994 Building No. 2401 B, 1st floor, Smart Village, Cairo-Alex. Highway (28 Km), 6

th of October.

Monte dei Paschi di Siena S.P.A 05/07/1994 10 Sarai EL- Gezeera St., 2nd floor, Flat No. 5, Zamalek 11211,Cairo.

Union De Banques Arabes et Francaises (UBAF) 15/08/1994 4 Behlar Passage, Kasr El-Nil St., Cairo.

Deutsche Bank AG 10/11/1994 Building No. 47 Section 1, City Center, New Cairo.

Intesa Sanpaolo Spa 13/03/1995 3 Abou El Feda St., Zamalek, Cairo.

JP Morgan Chase Bank N.A 05/08/1996 3, Ahmed Nessim St., Giza.

Bank of Tokyo Mitsubishi UFJ Ltd. 04/03/1997 Nile City Towers, South Tower, 10th floor/C, Corniche El-Nil, Cairo.

Credit Suisse AG 16/03/1998 7 b ,Ibn Shamer, Giza.

Credit Industriel et Commercial,CIC 22/07/1999 28 Sherif St., Cairo.

B.H.F Bank AG 02/08/1999 8 El-Sadd El-Aley St., Dokki, Giza.

Natixis 22/03/2000 El-Kamel Building, 54/B, Banks Zone, 6th of October.

Bank of Valletta Plc 10/07/2003 7 El Sawra square, Dokki, 7th floor, flat #71 .

Sumitomo Mitsui Banking Corporation 19/01/2004 Nile City Towers, North Tower 2005 C, 23rd floor, Corniche El Nile, Ramelet Boulak, Cairo.

Standard Chartered Bank 12/09/2005 El Shekha Fatma St.,City Stars Office Bldgs.,Star Capital "2", Office 21/22 Heliopolis, Cairo.

Sudanese Egyptian Bank 28/05/2008 4 Ahmed Basha St., 16th floor, Garden City, Cairo.

China Development Bank Corporation 02/11/2009 Apartment (no. 1 & 2), Building 41 A, St. 18., Maadi, Cairo.

Türkiye Iş Bankasi A.Ş 31/03/2010 Nile City Towers, North Tower, 27th floor, Corniche El-Nile, Cairo.

Caixa Bank S.A 08/07/2012 Nile City Towers, North Tower, 23rd floor, Corniche El-Nile, Cairo.

Source: Central Bank of Egypt.

(4/2) Representative Offices of Foreign Banks Registered with the CBE

(End of June 2017)

Central Bank of Egypt - Annual Report 2016/2017

16

End of June 2011 2012 2013 2014 2015* 2016 2017

Assets

Cash 14830 14534 29227 27276 27381 31432 57471

Securities & investments in TBs 474176 555326 653889 825524 1016025 1283616 1537036

Balances with banks in Egypt; of which: 117010 104269 131326 174786 240336 374644 876544

Lending and discount balances 885 978 953 363 1500 1682 4713

Balances with banks abroad; of which: 96080 75905 77012 78742 54834 51074 283966

Lending and discount balances 1398 2714 1800 2284 1520 1391 2502

Clients' Lending and discount balances 474139 506736 549120 587852 717999 942727 1426457

Other assets 93455 109390 123275 122693 142404 162601 239386

Assets = Liabilities 1269690 1366160 1563849 1816873 2198979 2846094 4420860

Liabilities

Capital 59049 67345 72061 77555 92550 100726 128420

Reserves 22056 25539 35838 47022 50080 63002 185846

Provisions 55105 54127 61264 62777 66049 66880 107859

Bonds & long-term loans 26180 27840 30312 30168 38453 48532 123960

Obligations to banks in Egypt 28171 19009 25608 17858 20763 60551 286116

Obligations to banks abroad 15168 14792 15222 14699 30147 86060 194551

Total deposits 957037 1023517 1186985 1429432 1734178 2116117 3027811

Other liabilities; of which: 106924 133991 136559 137362 166759 304226 366297

Payable cheques 5143 4848 4850 6880 8175 10984 12300


* As of March 2015, data of Arab International Bank were added to the banks’ aggregate financial position,thereby affecting the related tables.

( LE mn )

(5/1) Banks : Aggregate Financial Position

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

17

End of June 2011 2012 2013 2014 2015 2016 2017

Total Deposits 957037 1023517 1186985 1429432 1734178 2116117 3027811

Demand deposits 130087 133705 167939 215870 308915 354033 527044

Time & saving deposits and saving accounts 789407 851116 974286 1157976 1330179 1641305 2319072

Blocked or retained deposits 37543 38696 44760 55586 95084 120779 181695

In Local Currency 724878 777806 896477 1093686 1369674 1691590 2120787

Demand deposits 86967 86742 110598 150297 236440 275374 368774



In Foreign Currencies 232159 245711 290508 335746 364504 424527 907024

Demand deposits 43120 46963 57341 65573 72475 78659 158270




Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

( LE mn )

(5/2) Banks : Deposits by Maturity1

8

End of June 2011 2012 2013 2014 2015 2016 2017

Total Deposits 957037 1023517 1186985 1429432 1734178 2116117 3027811


Government sector 56728 58930 60252 78425 149115 258021 303714




External sector ** 2874 3876 4555 5038 10187 9559 10792






External sector ** 3718 3813 4202 4099 5026 3803 7800



** Including counterpart deposits of USAID. 19

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

(5/3) Banks : Deposits by Sector

( LE mn )

End of June 2011 2012 2013 2014 2015 2016 2017

Total Lending and Discount 474139 506736 549120 587852 717999 942727 1426457






External sector 1090 907 637 322 366 313 853






External sector 16596 15009 10916 7395 9517 8312 8011



Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017

20

(5/4) Banks : Lending and Discount Balances by Sector

( LE mn )

(LE mn)

2015/2016 2016/2017 2016/2017Public Private Total Public Private Total Public Private Total

Total GDP 641872.0 1264261.9 1906133.9 650115.0 1324070.9 1974185.9 1.3 4.7 3.6

Agriculture, Irrigation & fishing 157.3 212687.3 212844.6 165.6 219577.7 219743.3 5.3 3.2 3.2

Extractions 181260.8 56315.8 237576.6 177794.5 55515.1 233309.6 (1.9) (1.4) (1.8)

Oil 95320.5 16249.2 111569.7 89354.3 15013.1 104367.4 (6.3) (7.6) (6.5)Gas 84607.5 15935.9 100543.4 87058.1 15548.4 102606.5 2.9 (2.4) 2.1Others 1332.8 24130.7 25463.5 1382.1 24953.6 26335.7 3.7 3.4 3.4

Manufacturing Industries 91575.1 209629.4 301204.5 90339.0 217063.7 307402.7 (1.3) 3.5 2.1

Oil refining 68781.6 3622.5 72404.1 66680.7 3510.4 70191.1 (3.1) (3.1) (3.1)

Others 22793.5 206006.9 228800.4 23658.3 213553.3 237211.6 3.8 3.7 3.7

Electricity 28433.2 4556.4 32989.6 28972.1 4634.0 33606.1 1.9 1.7 1.9

Water, Sanitation and Recycling 10756.3 1199.6 11955.9 11175.8 1244.7 12420.5 3.9 3.8 3.9

Construction & Building 9753.2 86741.7 96494.9 10628.2 95077.5 105705.7 9.0 9.6 9.5

Transportation & Storage 15801.1 68013.6 83814.7 16695.4 71570.4 88265.8 5.7 5.2 5.3

Communications 11321.1 45566.9 56888.0 12666.6 51316.6 63983.2 11.9 12.6 12.5

Information 433.4 5517.5 5950.9 450.0 5740.4 6190.4 3.8 4.0 4.0

Suez Canal 32753.7 0.0 32753.7 33210.0 0.0 33210.0 1.4 0.0 1.4

Wholesale & Retail Trade 14018.2 240499.2 254517.4 14660.6 253215.9 267876.5 4.6 5.3 5.2

Financial Intermediaries &

Auxiliary Services44482.6 30430.8 74913.4 46162.0 31748.8 77910.8 3.8 4.3 4.0

Social Security and Insurance 10869.4 3386.8 14256.2 11299.0 3528.0 14827.0 4.0 4.2 4.0

Tourism 336.2 30636.7 30972.9 301.9 31876.0 32177.9 (10.2) 4.0 3.9

Real Estate 2019.4 179495.8 181515.2 2100.1 188798.2 190898.3 4.0 5.2 5.2

Real Estate Ownership 253.8 126540.7 126794.5 264.6 133365.5 133630.1 4.3 5.4 5.4

Business Services 1765.6 52955.1 54720.7 1835.5 55432.7 57268.2 4.0 4.7 4.7

General Government 185446.7 0.0 185446.7 190959.0 0.0 190959.0 3.0 0.0 3.0

Social Services 2454.3 89584.4 92038.7 2535.2 93163.9 95699.1 3.3 4.0 4.0

Education 0.0 33751.6 33751.6 0.0 35062.9 35062.9 0.0 3.9 3.9

Health 2159.4 40782.2 42941.6 2229.0 42360.6 44589.6 3.2 3.9 3.8

Others 294.9 15050.6 15345.5 306.2 15740.4 16046.6 3.8 4.6 4.6Source: Ministry of Planning, Monitoring, and Administrative Reform.

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017

(6/1) GDP at Factor Cost by Economic Sector

At 2011/2012 prices

Sectors

Rate of Change + (-) (%)

21

2015/2016 2016/2017 2015/2016 2016/2017 2015/2016 2016/2017

1- GDP at Market Price (2+5-6) 1918.1 1998.3 100.0 100.0 4.3 4.2

2- Total Domestic Expenditure (3+4) 2105.7 2211.6 109.8 110.7 5.5 5.0

3- Final Consumption 1803.7 1875.4 94.1 93.9 4.6 4.0

Final private consumption 1573.0 1638.9 82.0 82.0 4.7 4.2

Final government consumption 230.7 236.5 12.1 11.9 3.9 2.5

4- Gross Capital Formation 302.0 336.2 15.7 16.8 11.2 11.3

Investments 290.0 325.3 15.1 16.3 13.0 12.2

Change in stock 12.0 10.9 0.6 0.5 (19.5) (9.2)

5- Exports of Goods & Services 217.1 403.9 11.3 20.2 (15.0) 86.0

6- Imports of Goods & Services 404.7 617.2 21.1 30.9 (2.2) 52.5

22

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017

(6/2) GDP by Expenditure

At 2011/2012 prices

Value (LE bn) Structure (%) Rate of Change + (-) (%)

Source: Ministry of Planning, Monitoring, and Administrative Reform.

Groups

All Items 100.0 162.5 185.2 240.3 14.0 29.8

Food & Non-Alcoholic Beverages 39.92 191.4 225.1 315.8 17.6 40.3

Alcoholic Beverages & Tobacco 2.19 314.6 320.8 429.5 2.0 33.9

Clothing & Footwear 5.41 123.1 135.7 176.0 10.2 29.7

Housing, Water, Electricity, Gas & Fuel 18.37 124.2 130.8 140.9 5.3 7.7

Furnishings, Household Equipment & Routine Maintenance of the House

3.77 139.1 157.7 202.1 13.4 28.2

Healthcare 6.33 131.2 172.5 194.3 31.5 12.7

Transportation 5.68 139.2 144.2 181.6 3.7 25.9

Communications 3.12 96.8 96.9 98.6 0.0 1.8

Recreation & Culture 2.43 168.1 190.6 282.7 13.4 48.3

Education 4.63 196.9 219.0 246.0 11.2 12.3

Restaurants & Hotels 4.43 177.5 215.4 268.2 21.3 24.5

Miscellaneous Goods & Services 3.72 111.5 121.1 159.8 8.6 31.9

* The 9th series of CPI was introduced in August 2010. The weights involved in the formation of the Index were taken from the results of the 2008/2009 survey of income, expenditure and consumption using January 2010 as a base period.

2015/2016 2016/2017

Source: Central Agency for Public Mobilization and Statistics (CAPMAS), (Monthly bulletin of Consumer Price Index).

(6/3) Consumer Price Index (Urban Population) (January 2010=100)*

Relative Weights June 2015 June 2016 June 2017

Rate of Change in CPI (%)

Fiscal Year

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017

23

24

Sections

2015/2016 2016/2017

All Items 100.0 204.4 216.0 291.4 5.7 34.9

Agriculture & Fishing 25.1 298.1 339.0 447.4 13.7 32.0

Mining & Quarrying 21.8 125.9 102.5 103.5 (18.6) 1.0

Manufacturing 38.9 201.1 212.2 321.1 5.5 51.3

Electricity, Gas, Steam & Air Conditioning Supply

2.3 251.2 266.9 376.0 6.3 40.9

Water Supply, Sewerage, Waste Management & Remediation Activities

2.0 205.7 256.9 256.9 24.9 0.0

Transportation & Storage 2.8 164.8 169.8 191.5 3.0 12.8

Accommodation & Food Service Activities 5.0 139.6 149.7 201.9 7.2 34.9

Information & Communication 2.1 112.5 112.5 112.5 0.0 0.0

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

Source: Central Agency for Public Mobilization and Statistics (CAPMAS), (the bi-monthly bulletin of the Producer Price Index).

(6/4) Producer Price Index (PPI) (2004/2005=100)

Relative Weights June 2015 June 2016 June 2017

Rate of Change in PPI + (-) (%)

Fiscal Year

25

(LE mn )

Total Revenues: of which 491488 659184

Tax Revenues 352315 462007

Grants 3543 17683

Property Income 69452 91141

Sales of Goods and Services 29052 38058

Total Expenditures: of which 817844 1031941

Compensations of Employees 213721 225513

Purchases of Goods and Services 35662 42450

Interest 243635 316602

Subsidies, Grants and Social Benefits 201024 276719

Purchases of Non-Financial Assets (Investments) 69250 109141

Cash Surplus (+) / Deficit (-) -326356 -372757

Net Acquisition of Financial Assets 13139 6833

Overall Fiscal Surplus (+) / Deficit (-) -339495 -379590

Primary Surplus (+) / Deficit (-) ** -95860 -62988

Cash Surplus (+) / Deficit (-) as a percentage of GDP (%) -12.1 -10.7

Primary Surplus (+) / Deficit (-) as a percentage of GDP(%) -3.5 -1.8

Overall Fiscal Surplus (+) / Deficit (-) as a percentage of GDP(%) -12.5 -10.9

Revenues as a percentage of GDP (%) 18.1 19.0

Expenditures as a percentage of GDP (%) 30.2 29.7

Source: The Ministry of Finance.

* Data concerning the General Government are not available.

** Overall Fiscal Surplus (+) / Deficit (-) after excluding Interest Payments from Total Expenditures.

(7/1) Summary of Consolidated Fiscal Operations of the Budget Sector *


During FY 2015/2016 2016/2017

(US$ mn)

2015/2016* 2016/2017*

Trade Balance -38683.1 -35435.1

Exports 18704.6 21687.0

Petroleum 5674.3 6548.3

Other Exports 13030.3 15138.7

Imports -57387.7 -57122.1

Petroleum -9293.6 -11196.7

Other Imports -48094.1 -45925.4

Services Balance 6533.0 6811.1

Receipts 16079.3 16597.0

Transportation 9534.6 9108.1

of which: Suez Canal dues 5121.6 4945.3

Travel 3767.5 4379.7

Government Receipts 378.0 776.4

Other 2399.2 2332.8

Payments 9546.3 9785.9

Transportation 1339.1 1332.1

Travel 4091.0 2739.9

Government Expenditures 777.1 1124.1

Other 3339.1 4589.8

Investment Income Balance -4471.7 -4423.0

Investment Income Receipts 396.9 497.9

Investment Income Payments 4868.6 4920.9

of which: Interest Paid 752.0 1143.5

Current Transfers 16790.7 17471.8

Private Transfers (net) 16689.2 17322.8

of which: Egyptian Workers' Remittances 17077.4 17453.0

Official Transfers (net) 101.5 149.0

Current Account Balance -19831.1 -15575.2

26


(8/1) Balance of Payments

FY

(US$ mn)

2015/2016* 2016/2017*

Capital & Financial Account 21176.7 29034.2

Capital Account -141.4 -113.3

Financial Account 21318.1 29147.5

Direct Investment Abroad -164.2 -175.1

Foreign Direct Investment in Egypt (Net) 6932.6 7915.8

Portfolio Investments Abroad 192.1 208.4

Portfolio Investments in Egypt (Net) -1286.8 15985.3

Of which :Bonds -1444.8 5491.5

Other Investments (Net) 15644.4 5213.1

Net Borrowing 7102.7 7735.3

Medium -and Long -Term Loans -186.3 4133.4

Disbursements 2523.4 6679.1

Repayments -2709.7 -2545.7

Medium -Term Suppliers' and Buyers' Credit 1505.3 1516.4

Disbursements 1560.7 1637.3

Repayments -55.4 -120.9

Short -Term Suppliers' and Buyers' Credit (Net) 5783.7 2085.5 Other Assets -3476.9 -12095.7

CBE -104.4 -27.5

Banks 2092.1 -9462.5

Other -5464.6 -2605.7

Other Liabilities 12018.6 9573.5

CBE 5857.7 8128.6

Banks 6160.9 1444.9

Net Errors & Omissions -4158.6 258.2

Overall Balance -2813.0 13717.2

Change in CBE Reserve Assets, Increase (-) 2813.0 -13717.2

Source: CBE.

* Preliminary figures.

(8/1) Balance of Payments (Contd.)

27


FY

End of

Weighted average

Second: Market Rates Buy Sell Buy Sell

US Dollar 8.8571 8.8800 18.0400 18.1397

Euro 9.8172 9.8479 20.4411 20.5559

Pound Sterling 11.8960 11.9312 23.1417 23.2805

Swiss Franc 9.0434 9.0696 18.7487 18.8602

100 Japanese Yen 8.6226 8.6491 16.1000 16.1904

Saudi Riyal 2.3616 2.3680 4.8099 4.8366

Kuwaiti Dinar 29.3350 29.4342 59.4889 59.8374

UAE Dirham 2.4114 2.4183 4.9107 4.9392

Chinese Yuan 1.3331 1.3367 2.6521 2.6680

Source : CBE daily exchange rates

The interbank Rates started at 23/12/2004

June 2017

18.09118.7800

First: Interbank Rates US$

28


June 2016

(8/2) Average Exchange Rates

(In LE per foreign currency unit)

Number of

Transactions

(Unit)

Amount

(Thousand)

Market Value

(mn)

Number of

Transactions

(Unit)

Amount

(Thousand)

Market Value

(mn)

Shares in (Egyptian Pound) 5093148 57130365 143214 6580664 74493995 279241

Floor Transactions 5063958 55486254 125707 6551078 73358059 258741

Over the Counter Trading 29190 1644111 17507 29586 1135936 20500

Shares in Foreign Currencies

(US Dollar) 40141 686841 622 46345 783506 464



(Euro) 10 1044 17 31 1860 74

Floor Transactions - - - - - -


Source : Egyptian Financial Supervisory Authority (EFSA) - Monthly Report of the Capital Market.

29

(9/1) Trading in Shares on the Egyptian Exchange

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

During FY

2015/2016 2016/2017

Number of

Transactions Amount Market Value

Number of

Transactions Amount Market Value

(Unit) (Unit)

Bonds in (Egyptian Pound) 1805 94967 97336098 795 40075 40583363


Over the Counter Trading - - - - - -

Mutual Funds’ Certificates 58628 30614 1911675 39416 32004 2735796

30

Cen

tral B

an

k o

f Eg

yp

t - An

nu

al R

ep

ort 2

016/2

017

(Thousand) (Thousand)

During FY

(9/2) Trading in Bonds and Mutual Funds’ Certificates on the Egyptian Exchange

2015/2016 2016/2017

Source: Egyptian Financial Supervisory Authority (EFSA) - Monthly Report of the Capital Market.

2015/2016 2016/2017

Net Number of Transactions (Unit)-20538 135124

Purchases587430 900197

Sales607968 765073

Net Volume of Securities (mn)-829 425

Purchases6412 11809

Sales7241 11384

Net Value of Securities (LE mn)1447 8751

Purchases34844 79402

Sales33397 70651

Source: The data of the table were updated according to the recent data released by the Egyptian Financial

Supervisory Authority (EFSA).

31

Ce

ntra

l Ba

nk

of E

gy

pt - A

nn

ua

l Re

po

rt 20

16

/20

17

(9/3) Foreigners' Transactions on the Egyptian Exchange

During FY

annual report 2016/2017 · 2018-07-18 · ii central bank of egypt – annual report 2016/2017...

Documents