Egypt replaces Central Bank governor amid criticism

Egypt has appointed Tarek Amer as new central bank governor following the resignation of Hisham Ramez, state-owned Al-Ahram newspaper reported on Wednesday.

Ramez decided to not renew his term, which is due to end in November, and his resignation was accepted by Egypt’s President Abdelfattah al-Sisi.

Amer was deputy governor at the Central Bank between 2003 and 2008, and is the former CEO of the country’s largest state-owned bank, the National Bank of Egypt.

With Ramez’s exit, the Egyptian pound is likely to see further devaluation, analysts said. 

The outgoing governor’s resistance to devaluing the pound— which many economists and investors consider to be overvalued– had led to tensions between him and President al-Sisi’s government.  

While Ramez has been urging the government to support the currency and include a cap on dollar deposits in banks, economists have argued that such measures were fast depleting the country’s foreign currency reserves.

Investment minister Ashraf Salman last month argued that it would be better for Egypt to allow its currency to weaken rather than to deplete its foreign exchange reserves.

London-based consultancy Capital Economics said given that Amer’s appointment was made by President al-Sisi, he may well be more inclined to share the government’s view.

“All told, then, today’s announcement suggests a further devaluation of the pound– something we think is necessary to revive the economy– now seems more likely,” Jason Tuvey, Middle East economist at Capital Economics said.

Meanwhile, last week the central bank did allow the pound to weaken twice against the dollar.

On Sunday, the bank said in a statement that it weakened the pound from 7.83 to 7.93 pounds per dollar.

Write to Brinda Darasha at brinda.d@argaamplus.com