رئيس مجلس إدارة البنك التجاري الدولي المصري لـ CNBC عربية: الحكومة تجري حالياً خطوات تصحيحية للأوضاع الاقتصادية
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00:00 The Central Bank's Monetary Policy Committee has decided to hold an exceptional meeting today.
00:05 It has raised interest rates on the two interest and loan returns for one night,
00:10 and the main operating price of the Central Bank is 600 points.
00:14 The interest rates on the loan are 27.25% and the loan 28.25%.
00:21 Therefore, the Central Bank has raised interest rates since the beginning of 2024 by 8%.
00:29 Welcome Mr. Hisham Aziz Al-Arab, President of the International Trade Bank Committee.
00:35 Welcome.
00:37 How do you see the steps taken by the Central Bank of Egypt and its ability to control the exchange market?
00:46 Good evening.
00:49 First, let's talk about the macro or the big picture. The big picture is the health steps mentioned by the Prime Minister at the end of his speech
00:59 at the time of signing the wisdom head agreement.
01:03 The big picture is, we always look at the dollar as if it were the disease and we are trying to treat it since 2016.
01:13 The dollar is not the disease, it is a disease. The disease was in the inflation that led to the price of the pound to increase.
01:24 I personally think that the health steps, today, anyone who has dollars in his or her hand,
01:31 whether it is from the sale of goods or other transactions, or from the Central Bank,
01:36 the dollar should go to the Central Bank. In addition to the health steps, the situation of the Central Bank's net foreign assets and banks has improved.
01:45 The health steps will be raised and the market will be allowed to intervene if the free market exceeds the fair value of the pound, if it requires it.
01:56 In addition to the political renewal of the Central Bank by raising the interest rate, the dollar will go to the Central Bank.
02:06 The pound in return should go to close the open account between the Ministry of Finance and the Central Bank, and thus reduce the public debt.
02:13 This is part of the sterilization and reduction of the money supply. Instead of one action, another action will reduce their debt.
02:19 We are talking about the approach of the trillion pound, so taking one step with a trillion pound is a big number.
02:27 The important thing here is not the steps that have been taken, and I think that today, according to what I see, all the basic things, such as medicine, food, and so on, will be removed from the banks, and the other steps will follow.
02:43 The most important thing is that I look at the international markets and the reaction of the international market to the action that it takes.
02:50 Many people use the CIPB share in London and make a kind of equation with the local share and calculate the dollar price on it.
03:00 At one point, we reached 70 pounds, the dollar price. Today, thank God, I look at the prices. This is a free market.
03:07 You can say that it is similar to the common market, but it is a more organized market. Today, we are talking about 50-51 pounds, and this is not far from the banks' prices.
03:17 The conversion is happening, or almost happening.
03:21 The other important thing that we all have is that there was a very strong shock in the past few weeks about Egypt's ability to comply with its international commitments.
03:29 This has almost disappeared because the cost of insurance on Egypt's debts has dropped from 16% over zero to 5%.
03:40 The massive drop is a message, a message of how the market reads you.
03:45 What interests me the most as a private sector is how the foreign market reads, which is the free market, more than a statement or a dispute.
03:54 Therefore, the market reads that you made statements, and you are committed to these statements.
03:59 The most important thing in all this is the continuity of the measures taken by the state.
04:08 Because the state is the key.
04:11 Mr. Hisham, as you mentioned, Egypt's ability to comply with its international commitments. Let's talk about the ability of banks to comply with the clients' commitments and the dollar demands by individuals or even companies.
04:27 There are two commitments to banks. The first commitment, so that people do not mix things up, is the percentage of liquidity in the banks.
04:35 Banks have client services, and the liquidity is very high in banks, whether in pounds or dollars.
04:41 But I can't take client services and sell them to a client to buy goods.
04:48 I mean, the dollars were in the banks, but of course, this is contrary to all banking rules.
04:54 I am abstaining from the dollar, which is someone who has come to abstain from it.
05:00 Of course, the result is the black market and the difference in prices, and that you were trading at a fair price and the fair value was somewhere else.
05:07 All this was because the dollars entered the country, but entered the country in other ways, other than the official ways.
05:16 And based on that, you as a person did not see it.
05:19 And it created a kind of feeling among people, no, with the dollar, he slept on it.
05:25 With the dollar, he slept on it. It is not normal. You take the pound, you work with it, you live your life and you go.
05:31 But it is not normal that someone, for example, in England, got a dollar and said, "No, I will not buy it, it is sterling, wait."
05:40 Sterling is your job, and so on.
05:43 The general circumstances were the reason that the fair monetary agreements in the bank withdrawals were broken, and that banks should use it in compliance with the customer's requirements in the withdrawal.
05:56 So, Mr. Hisham, there is a question about your appreciation of the fair price of the pound in front of the dollar, in light of all these new conditions and the increase in interest rates.
06:09 I swear to you, I say that the fair price is always what the market tells you.
06:14 As you will see on the screen today, this is the fair price.
06:17 There is a fair price according to the market, and the fair price according to the circumstances of the market, of course, its supply and demand, and its difference.
06:22 And there is a fair price, which you can call it academic.
06:26 The academic price is 43 pounds.
06:29 This is the academic price.
06:31 And there are people who use different formulas, and the variables in them are different.
06:35 Someone can tell you 44 pounds, someone can tell you 41 pounds, or someone can tell you 48 pounds, depending on the variable.
06:41 But we are in the area of the fair price.
06:43 Anything above it is the supply and demand of the market.
06:46 Anything below it is also the supply and demand of the market.
06:48 And by the way, I want to tell you something.
06:50 In 2005 and 2006, the Central Bank was forced to raise the pound and the dollar, because the fair value of the pound was 5.70 pounds.
07:04 And the dollar was working at 6 pounds.
07:06 So the Central Bank was forced to raise the pound, and this affected the exports, and the tourism at the time, and there was a crisis.
07:14 So the Central Bank went back to the administration to adjust the price to encourage export and tourism.
07:20 So it happens in both directions, in terms of overshooting or undershooting.
07:24 So this is there.
07:25 And what reassures me is that Mr. Governor was one of the people who worked with the Central Bank Governor in 2004, 2005, and 2006 to re-adjust the currency market and know all the requirements.
07:39 So this is also one of the things that you look at the administration.
07:42 Does the administration give you a kind of confidence in decisions or not?
07:46 Good. And you said at the beginning of your speech, an important speech, about the difference between the dollar and the dollar and its rises and so on.
07:55 To what extent are these new policies, I can't say, able to suppress the inflation, but what are its effects in your opinion?
08:02 Look, we are talking about inflation since 2014 and 2013.
08:09 The lack of balance throughout history in Egypt is the main reason for inflation.
08:16 Because there is a lack of balance, the state funds this deficit from the Central Bank.
08:20 The money flows into the system, its money velocity, and it comes out with inflation.
08:25 Take advantage if you want.
08:27 The problem with inflation in Egypt is not the dollar price.
08:29 The dollar price is a substitute for the main disease, which is the lack of balance.
08:33 So addressing or taking advantage of the state's priorities, the issue of the lack of balance,
08:40 and there is also the principle of balance, because this will also give Mr. Wateer the opportunity to evaluate his investments and expenses properly.
08:52 Good. When will the border of credit cards be opened, Mr. Hisham?
08:58 I was on Twitter a while ago, and I say that I as a bank will open the credit card in a few days.
09:06 Thank you Mr. Hisham Azzel Araf. You are the president of the International Trade Bank. Thank you for being with us on CNBC Arabia.