The Central Bank of Egypt (CBE) said on Sunday it was lowering the reserve requirement on local currency deposits to 10 per cent from 12 per cent to increase banking sector liquidity, its second such move in two months.

The new ratio is effective starting on 26 June, the bank said on its website. On 20 March, it announced it was reducing the ratio to 12 per cent from 14 per cent.

"To further ease credit conditions in the market and provide additional permanent liquidity into the banking system, the CBE's Board decided to reduce the RRR (required reserve ratio) from 12 per cent to 10 per cent," the bank said.