Amwal Al Ghad English - 2013-05-17 08:58:27
Egypt's central bank, worried that banks are investing too much of their cash in local money market and fixed income funds, is imposing stricter limits on such investments, a move asset managers say could cripple their industry.
In a copy of a central bank directive obtained by Reuters, the central bank says banks will not be able to invest more than 2 percent of their tier-one capital in local money market and fixed-income funds, down from 5 percent at present.
A central bank official said that some banks' investments in these funds had approached the size of their entire loan portfolio.
"It's something that any central bank would be worried about," the official, who asked not to be named, told Reuters by telephone.
"We don't regulate these companies, we don't supervise these companies, and they (the banks) leave this amount of money to be managed by these companies," the official said.
The bank's directive, dated May 9, has been circulated to banks but does not say when it would come into effect. More»