New central bank role enshrined in law

16 November 2001

The cabinet on 27 November approved a new law giving the Central Bank of Egypt greater authority over monetary policy and extending its supervisory role (see Cover Story).

The law will entail the governor of the central bank reporting directly to President Mubarak and parliament. The governor previously reported to the economy minister - a post that has now been abolished - and to the prime minister.

Under the new law, the central bank will have sole responsibility for exchange rate policy, as well as managing liquidity in the financial market and looking after external debt. It will also supervise the banking and insurance sectors.

Newly appointed central bank governor Mahmoud Abul-Ayoun said on 27 November that a proposal to replace the local currency's peg to the dollar with a link to a basket of currencies was under active consideration.

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