Egypt’s Central Bank Extends Measures to Offset the Economic Impact of COVID-19

24 February 2025

Egypt was one of the few emerging market countries that experienced a positive GDP growth rate in 2019-2020 and 2020-2021. Following quick and decisive action in 2020 to limit the worst economic impacts of the COVID-19 pandemic, the Central Bank of Egypt has continued to adjust and bolster its response to the ongoing global health crisis.

When economies around the world started shutting down in 2019, the Monetary Policy Committee took a decision early on to cut the Central Bank of Egypt’s interest rate by 300 basis points. This was followed by two further cuts in September and November 2020, reducing interest rates by an additional 100 basis points.

Another key early move was the bank’s decision to defer credit dues for all customers – corporates, SMEs, and individuals, including retail and mortgage loans – for a period of six months. When the deferment period came to an end in September 2020, the Central Bank of Egypt issued a number of directives to banks to continue supporting clients whose cash flows had been negatively affected by the pandemic. These included:

Setting appropriate procedures to deal with clients, based on their ability to repay debts and their cash flow;
Restructuring debts; and
Making sure that debt restructuring does not significantly impact clients’ credit risk ratings.

The Central Bank of Egypt facilitated the usage of electronic payment methods through the cancellation of fees and commissions of points of sales (POS) and cash withdrawals from ATMs and E-Wallets for a period of 6 months which ended in September 2020. Furthermore, the cancellation of fees and commissions on ATM cash withdrawals was extended until the end of June 2022. The fee exemption on local transfers was also extended from an initial three-month period to the end of June 2022 – as were charges on other electronic payments, including fees on mobile wallet transfers.

To continue its support for the struggling tourism sector, the Central Bank of Egypt bolstered its initial loan conditions for businesses by extending repayment grace periods. This is in addition to efforts to ensure that non-performing businesses would be removed from non-performing loans list – and have legal cases waived – if they paid 50 percent of their outstanding debts by 30 June 2021. EGP 2 billion has also been made available in tranches to finance the replacement and renovation of hotels and other infrastructure, and support for individuals working in the tourism sector has also been extended for one year, until the end of December 2022.

Initiatives aimed at helping non-performing businesses in all sectors and non–performing individuals have also been launched. The initiative was applied on non-performing businesses with an outstanding debt of EGP 10 million and non–performing individuals with an outstanding debt of 1 million. The actions that were taken included the waiving of all current and exchanged legal cases, removal from non - performing loans list, releasing of all guarantees that were held to secure the debt and lifting the ban on dealing with these clients.

To support companies in the industrial, agricultural and construction private sectors, EGP 100 billion was allocated through banks at an interest rate of 8% to finance the purchase of raw materials and capital expenditure along with salaries, with EGP 1.2 billion specifically earmarked to finance the down payment through banks for companies working in ceramic and porcelain that need to reschedule their natural gas debts.

Furthermore, the Central Bank of Egypt has expanded its successful “electronic acceptance initiative” to increase the number of POS devices in the country. This has seen an additional 100,000 new POSs distributed by banks, on top of the 156,000 POSs already released, reducing the need for cash and its risks associated with the pandemic.