(Bloomberg) --
Egypt has scope to further cut interest rates to combat the impact of the coronavirus on an
economy that’s in good shape after sweeping reforms, the central bank governor said.Tarek Amer’s comments came after the central bank on Sunday introduced temporary cash withdrawal restrictions, a step he said was necessary after customers took 30 billion pounds ($1.9 billion) from banks in the past three weeks. The measure, which could be revisited soon, seeks to encourage people to use bank transfers and e-payments.“We want to stop putting cash under the mattress,” Amer said in an interview aired on local TV.The Arab world’s most populous nation, which has reported 609 cases of the virus and 40 deaths, has enacted other measures to support the economy, including deferring credit repayments for six months. The central bank is due to make its next rate decision Thursday.Amer said late Sunday that the economic program launched in 2016, which sharply devalued the currency and cut spending, has put Egypt in a position to withstand the crisis.While other economies could fall into recession in the second and third quarter of the year, Egypt will see only a dip in growth, he said. Also providing a cushion is the drop in global oil prices and an expected decline in the import bill, he said, adding that Egyptians typically spend $3.5 billion while traveling abroad -- cash that will now be saved.Egypt Makes Largest-Ever Rate Cut to Tackle Fallout of OutbreakWhile foreigners have withdrawn about $500 million from the stock market in the recent period, that will be more than offset by 20 billion pounds of central bank support for the bourse, Amer said.Other tools available include more rate cuts, Amer said. The monetary policy committee reduced key rates by 3 percentage points after an emergency meeting earlier this month, although that still left Egypt with one of the world’s highest real rates.Indicators such as inflation “are good,” Amer said.Other takeaways from the interview:Debt-installment payments that are being deferred for six months total around 1.8 trillion poundsEgypt has paid all obligations to foreign investors who sold off treasuriesExpects import bill to drop from slightly over $11.8 billion to $7 billionEgyptians traveling abroad spend around $3.5 billion; that money will now be saved, given travel restrictionsExpects government to cut fuel prices given the crash in global crudeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.