Egyptian court suspends implementation of central bank decree to limit CEO terms

Sunday 26-06-2016 04:37 PM

Central Bank of Egypt (CBE) - Archive

By Reuters

CAIRO (Reuters) - An Egyptian court suspended on Sunday the implementation of a central bank decree to limit the terms of bank chief executives to nine years, according to the lawyer who appealed the decision.

In March, Egypt's central bank governor Tarek Amer set a 9-year term limit for all bank CEOs which would have forced eight of the country's banking chiefs out of their jobs.

The decree caused consternation among bankers who described it as an overreach into the affairs of private sector companies whose managers are answerable to their shareholders.

The central bank, which has been grappling with an acute shortage of foreign currency and seeking to limit speculation against the Egyptian pound, said at the time it had issued the decree to help modernize the sector and "inject new blood."

Atef al-Sharif, a lawyer who is representing Mohamed Sayyed Shaaban, a stockholder ofEgypt's largest-listed bank CIB, said the central bank would have to follow the court decision.

"The central bank only has the right to supervise banking sector units not to interfere in their internal affairs and impose restrictions on their management," Sharif told Reuters.

The central bank could not immediately be reached for comment.

The central bank's foreign reserves have more than halved from about $36 billion before the 2011 uprising that ended Hosni Mubarak's 30-year rule.

The political unrest that followed drove away tourists and foreign investors that were key sources of foreign currency.

Amer, who took the helm at the central bank in November, has taken a series of bold steps to ease the forex crunch, including raising caps on the transfer and deposit of foreign currencies and devaluing the Egyptian pound in March.

Those measures have yet to succeed in stamping out a black market for dollars while inflation reached seven-year highs in May, forcing the central bank to hike benchmark interest rates by 100 basis points.


(Reporting by Ehab Farouk; writing by Amina Ismail)

facebook comments