Egypt: Parliament Confirms Reappointment of Central Bank Governor

Egypt's Central Bank Governor Tarek Amer speaks at a news conference in Cairo, Egypt, November 3, 2016. REUTERS/Mohamed Abd El Ghany
Egypt's Central Bank Governor Tarek Amer speaks at a news conference in Cairo, Egypt, November 3, 2016. REUTERS/Mohamed Abd El Ghany
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Egypt: Parliament Confirms Reappointment of Central Bank Governor

Egypt's Central Bank Governor Tarek Amer speaks at a news conference in Cairo, Egypt, November 3, 2016. REUTERS/Mohamed Abd El Ghany
Egypt's Central Bank Governor Tarek Amer speaks at a news conference in Cairo, Egypt, November 3, 2016. REUTERS/Mohamed Abd El Ghany

Egypt's parliament approved the appointment of central bank governor Tarek Amer to a second four-year term on Thursday, state media reported.

The parliament, in a recess, held an emergency session to vote on the decision by President Abdel Fattah al-Sisi to reappoint Amer, whose first term ended on Wednesday. The approval was required under the constitution.

Amer was first appointed in 2015 when Egypt was in a currency crisis. A three-year IMF economic reform program included a sharp devaluation of the pound currency, the introduction of a value-added tax and the elimination of subsidies on most fuel prices.

"Clearly the heavy lifting is done but then we need to have someone to protect these gains and build on them," said Mohamed Abu Basha, head of macroeconomic analysis at EFG Hermes.

Steps still needed include a full transition to inflation-targeting and further development of the banking sector, especially digitalization and pushing banks to lend to wider sectors, Abu Basha said.

Allen Sandeep, head of research at Naeem Brokerage, said: "The challenge now will be to walk a balanced path between easing monetary policy and keeping inflation in check."

Governors are allowed only two terms under the constitution.



China Mulls Draft Law to Promote Private Sector Development

A Chinese national flag flutters on a financial street in Beijing. (Reuters)
A Chinese national flag flutters on a financial street in Beijing. (Reuters)
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China Mulls Draft Law to Promote Private Sector Development

A Chinese national flag flutters on a financial street in Beijing. (Reuters)
A Chinese national flag flutters on a financial street in Beijing. (Reuters)

Chinese lawmakers are deliberating a draft of the country's first basic law specifically focused on the development of the private sector, the country’s Xinhua news agency reported.

“The law will be conducive to creating a law-based environment that is favorable to the growth of all economic sectors, including the private sector,” said Justice Minister He Rong, while explaining the draft on Saturday during the ongoing session of the Standing Committee of the National People's Congress, the national legislature.

The draft private sector promotion law covers areas such as fair competition, investment and financing environments, scientific and technological innovation, regulatory guidance, service support, rights and interests protection and legal liabilities.

The draft has incorporated suggestions solicited from representatives of the private sector, experts, scholars and the general public, the minister said.

China left its benchmark lending rates unchanged as expected at the monthly fixing on Friday.

Persistent deflationary pressure and tepid credit demand call for more stimulus to aid the broad economy, but narrowing interest margin on the back of fast falling yields and a weakening yuan limit the scope for immediate monetary easing.

The one-year loan prime rate (LPR) was kept at 3.10%, while the five-year LPR was unchanged at 3.60%.

In a Reuters poll of 27 market participants conducted this week, all respondents expected both rates to stay unchanged.

Morgan Stanley said in a note that the 2025 budget deficit and mix are more positive than expected and suggest Beijing is willing to set a high growth target and record fiscal budget to boost market confidence, but further policy details are unlikely before March.

Last Friday, data released by the country's central bank said total assets of China's financial institutions had risen to 489.15 trillion yuan (about $68.03 trillion) by the end of third quarter this year.

The figure represented a year-on-year increase of 8%, said the People's Bank of China.

Of the total, the assets of the banking sector reached 439.52 trillion yuan, up 7.3% year on year, while the assets of securities institutions rose 8.7% year on year to 14.64 trillion yuan.

The insurance sector's assets jumped 18.3% year on year to 35 trillion yuan, the data showed.

The liabilities of the financial institutions totaled 446.51 trillion yuan, up 8% year on year, according to the central bank.

Separately, data released by the National Energy Administration on Thursday showed that China's electricity consumption, a key barometer of economic activity, rose by 7.1% year on year in the first 11months of the year.

During the period, power consumption of the country's primary industries increased by 6.8% year on year, while that of its secondary and tertiary sectors rose by 5.3% and 10.4%, respectively.

Residential power usage saw strong growth of 11.6% during this period, the administration said.

In November alone, power usage climbed 2.8% from one year earlier, according to the data.