The Central Bank of Egypt (CBE) announced on Monday that domestic liquidity increased by 7.2 percent to EGP 4.140 trillion from July to January, an increase amounting to EGP 276.8 billion.
The CBE clarified that the increase has a positive impact on quasi-money growth, which increased to EGP 213.1 billion, or 7.2 percent, and on money supply, which increased by EGP 63.7 billion, or 6.9 percent. It said in a report that the quasi-money increase stems from the hike in non-current deposits, which saw a surge of EGP 287.8 billion, or 12.9 percent, and from the decrease in deposits in hard currency equivalent to EGP 74.7 billion, or 10.5 percent.
It also said that the money supply increase came as a result of current deposits in local currency rising by EGP 35.1 billion, or 8.1 percent, and an increase in circulated cash outside the banking system of EGP 28.6 billion, or 5.9 percent.
The report also attributed the liquidity hike to the increase in gross domestic and foreign assets; gross foreign assets increased by the equivalent of EGP 75.1 billion, or 25 percent, due to the increase in gross foreign assets that the CBE has equivalent to EGP 40 billion, and the increase in gross foreign assets in banks, equivalent to EGP 35.1 billion.
Gross domestic assets in the banking system grew by EGP 201.7 billion, or 5.7 percent, as a result of the public budget’s negative balance increase which increased by EGP 124.9 billion, or 51.3 percent, and the domestic credit hike that increased by EGP 326.6 billion, or 8.6 percent.
It report also showed that the domestic credit hike came as a result of the increase in net liabilities from the government of EGP 252.3 billion, in the family sector liabilities of EGP 55.5 billion, and in the private business sector of EGP 22 billion, in addition to the decrease in the public business sector of EGP 3.2 billion.