Business monthly (Egypt) - - THE YEAR AHEAD -

most ea­gerly an­tic­i­pated event of 2015 wasn’t the open- ing of “Star Wars: The Force Awak­ens.” What Egypt’s busi- ness com­mu­nity was really wait­ing for was the Nov. 27 ar­rival of Tarek Amer, the new Cen­tral Bank gov­er­nor. Egypt, strug- gling un­der per­sis­tent dol­lar short­ages, hoped Amer would bring with him sore- ly-needed clar­ity and vi­sion af­ter sev­eral years of opaque and of­ten coun­ter­in­tu­itive mon­e­tary pol­icy.

Hisham Ramez stepped down early as CBE gov­er­nor on Nov. 11, cap­ping what was a dif­fi­cult term right from the be­gin- ning. Just 10 days into his ten­ure, in Jan­uary 2013, masked gun­men at­tacked his con­voy. Fac­ing slower-than-ex­pected growth and high in­fla­tion, Ramez de­fend- ed the pound against the dol­lar, which ul­ti­mately drew crit­i­cism. In his fi­nal year in par­tic­u­lar, he took a lot of heat for levy- ing a se­ries of un­pop­u­lar cap­i­tal con- trols—mainly lim­its on dol­lar de­posits in banks—meant to do away with the paral- lel ex­change rate, which has un­nerved in­vestors. But in the end, Ramez’ poli­cies failed to erad­i­cate the black mar­ket or bring more dol­lars into the sys­tem. Crit­ics say prop­ping up the pound has hurt Egypt’s com­pet­i­tive­ness while al­low­ing for­eign re­serves to dip to dan­ger­ous lev- els. Mean­while, the de­posit lim­its left many busi­nesses un­able to get the dol­lars they need to buy key im­ported sup­plies. Egypt’s non-oil busi­ness ac­tiv­ity shrunk dur­ing eight out of the first 11 months of last year. In Novem­ber, the Emi­rates NBD Pur­chas­ing Man­agers In­dex for Egypt fell to its low­est level since Septem­ber 2013. “Once again, re­spon- dents are cit­ing FX is­sues as a fac­tor that is re­sult­ing in de­clin­ing out­put across the pri­vate sec­tor,” said Jean-Paul Pi­gat, a se­nior econ­o­mist at the bank, in a state- ment. Egypt’s eco­nomic re­cov­ery will de­pend on “au­thor­i­ties eas­ing cap­i­tal con- trols and al­low­ing the pound to weaken in 2016,” he said.

No won­der the mar­ket seems to be hold­ing its breath in an­tic­i­pa­tion of

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