Central Bank governor resigns, Cabinet disputes announcement

Central Bank governor resigns, Cabinet disputes announcement

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Sat, 22/12/2012 - 21:02

Central Bank of Egypt Governor Farouk al-Oqda has resigned from his position, sources from the president's office reported Saturday.

The Cabinet, however, has denied any such reports.

The announcement comes on the heels of a report last week by Turkish news agency Anadolu, which reported that Oqda informed President Mohamed Morsy of his intention to leave his post by end of December, insisting that his original resignation, which he submitted in June, be accepted.

Speaking on condition of anonymity, sources told Anadolu that Oqda has nominated three potential successors for Morsy to choose from: Federation of Egyptian Banks head and National Bank of Egypt chairman Tareq Amer, Banque Misr head Mohamed Barakat and Commercial International Bank Managing Director Hesham Ramez.

President Mohamed Morsy had met with Ramez earlier on Saturday, raising the possibility of Ramez becoming the bank's next governor.

Oqda's reservation also comes after an announcement earlier this month that Morsy will issue a declaration to amend the 2003 presidential decree governing the Central Bank of Egypt. It has thus far not been issued.
 
The amendment reduces the number of board members and grants the president the right to nominate the next governor without the usual recommendations from the prime minister.

Cabinet interference in the bank's appointments was seen as detrimental for the bank's policies, since the Cabinet sets short-term financial policies while the Central Bank usually eyes more long term policies concerned with the exchange rate, determining the size and rate of growth of the money supply and banking sector laws, among other things.

The Bank's allocation of around US$20 billion in foreign reserves to prevent devaluation of the pound over the past two years has been met with mixed reactions, criticized by some experts for depleting reserves but lauded by others for propping the pound long-term.