Emerging Markets Rates and Currencies Handbook

141 Citi | Emerging Markets Currencies Handbook 2021 Citi in Egypt Citibank’s first entry into Egypt was in 1955, opening the first branch of a US bank in the Middle East. Following the nationalization of the late 50’s, Citi re-introduced itself in 1975, through its branch in Cairo, with a license to operate in foreign currency. In 1993, Citibank Egypt received its license to operate in local currency, which allowed for the gradual development of a full-fledged Corporate and Investment Banking business that caters to corporate customers and financial institutions, providing the full range of Treasury and Trade Services, Corporate Finance and Markets solutions. Citi sold the Consumer Banking business to Commercial International Bank in 2015 in line with its global strategy. The bank serves multinationals, global investor clients, Government of Egypt, and local/Public Sector clients and fully supports their banking, investment and credit requirements. Market Overview* • Nov 2016 IMF 3Year $12B reform program. • Reform included floating of EGP, removal of energy subsidies, amending civil service law and introduction of VAT. • EGP witnessed one time depreciation of more than 100% and then appreciated back to current $1= EGP15.7. • Foreign reserves moved from barely 3 months import coverage to more than 7 months import coverage. • FX Market became very liquid, up from zero daily volume to $200MM average daily volume with peak of more than $1B in one day. • Inflation improved from 33% in 2017 to 5.4% in 2020. • Interest rates hikes of 700bps in 2017-18 followed by 1000bps cuts in 2019-2020. • Rating agencies improved Egypt rating from B- with a negative outlook to be B with stable outlook after Covid-19. EGYPT (EGP — Egyptian Pound)