An official statement from the Central Bank of Egypt (CBE) has noted that the issuance of Egyptian banknotes rose to EGP 264.1billion (US$37.9bn) during the 2012/2013 financial year, an increase of EGP 56.7 billion (US$8.15bn).
It was noted in the statement that government expenditure led to an increase in the budget deficit, after reaching EGP 588.2 billion (US$84.5bn) during the financial period.
“Without a doubt, this resulted in an increased demand on banknotes for circulation, especially if this expenditure is used to increase wages, pensions and [financial] compensations that the government pays for individuals,” Central Bank of Egypt.
The CBE noted that there have been three main periods of banknote issuance during the past three years, of which it states they have abided by economic standards such as Real Gross Domestic Production (GDP) and inflation rates.
The first period was attributed to the increased demand caused by the closing of banks and subsequent removal of ATMs.
The second, in 2013, was due to fears of political escalations on the anniversary of the January 2011 uprising.
The third occurred in June 2013 in order to “meet the citizens demands for banknotes and to face seasonal expenditures”, reaching a total issuance of EGP 18.1 billion (US$2.6 billion).
Daily News Egypt advises that Al-Jazeera, the area’s television broadcaster, reported that prime minister Aly Lotfy criticised the Central Bank for committing “the heinous crime against the economy by printing EGP 22bn banknotes in January.”
Source: Daily News Egypt
