IMF: Egypt's banking sector "stable" despite COVID-19 repercussions

WASHINGTON - 2 September 2020: The International Monetary Fund (IMF) has asserted that Egypt's banking sector remains stable despite the economic repercussions caused by the global spread of the novel coronavirus (COVID-19).

In a report released on Tuesday, the IMF said that the Egyptian banking system is liquid and well capitalized, with strong profitability and asset quality.  
 

"The Central Bank of Egypt (CBE) remains committed to maintaining exchange rate flexibility to help absorb exogenous shocks while containing disorderly market conditions," the international lender noted.
 

"The CBE agreed that banks should engage with heavily affected borrowers to alleviate near-term stresses via targeted loan modifications. While the temporary moratorium on loan repayments can dampen the immediate impact of the outbreak, more targeted restructuring modalities, directed towards those borrowers that have been disproportionally affected, could help reduce moral hazard and contain costs to the banking system," the IMF added.
 

In May, Egypt received a sum of 2.77 billion dollars from the IMF to address the coronavirus pandemic.