The Central Bank of Egypt.
In its Financial Stability Report, the CBE said the financial stability index recorded a notable improvement, supported by stronger macroeconomic indicators, stable exchange rates, and the success of monetary policy in containing inflationary pressures while attracting record levels of foreign investment.
The report highlighted that the banking sector continues to provide foreign currency financing with lower exposure to systemic risks from sudden capital outflows.
Egypt’s foreign exchange reserves rose to $47.8 billion in March 2025, sufficient to cover short-term external debt and over six months of imports, driven by higher non-oil exports, tourism revenues, remittances, and long-term foreign direct investment.
According to the report, the banking sector remains the backbone of financial stability, maintaining strong capital and liquidity indicators well above regulatory requirements.
The capital adequacy ratio reached 18.3 percent in March 2025, compared to a regulatory minimum of 12.5 percent, while liquidity ratios stood at 37.1 percent in local currency and 73.7 percent in foreign currency, exceeding required levels.
The sector’s profitability also improved, with returns on average assets and equity reaching 2.6 percent and 39 percent, respectively, during fiscal year 2024.
Total banking assets grew by 45.8 percent, representing 93.5 percent of total financial system assets and 125.4 percent of nominal GDP, while deposits increased by 25.3 percent, mainly supported by stable household savings.
On fiscal performance, the CBE noted that the government continues to achieve fiscal discipline targets and diversify local financing sources, reducing risks linked to public finances.
The share of government securities in total banking assets declined, while foreign investors’ holdings of treasury bills rose to 44.7 percent in March 2025.
The non-banking financial sector also recorded solid growth, as total assets increased by 22.7 percent in 2024, representing 6.5 percent of total financial system assets.
The sector introduced new financial products and services and began applying Basel III standards to enhance risk management. The EGX30 index gained 19.5 percent in 2024 and continued to rise into early 2025.
Joint stress tests conducted by the CBE and the Financial Regulatory Authority confirmed the strength and resilience of the financial system, showing low to moderate exposure to capital and liquidity risks even under adverse conditions.
The report also highlighted progress in financial inclusion, which rose to 74.5 percent in March 2025, alongside strong momentum in digital transformation, as mobile wallet accounts increased by 26 percent YoY.
For the first time, the CBE published its macroprudential policy framework, outlining its strategy to strengthen coordination between monetary, fiscal, and macroprudential policies and to enhance transparency in achieving long-term financial stability in Egypt.
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