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Egypt banks to remain closed
Egypt's stock exchange and its banks will be closed on Sunday, a move analysts say could rattle investors.
Last Modified: 29 Jan 2011 15:04 GMT
The stock exchange and banks to be closed as a 'precautionary measure' may spook investors [AFP]

The Egyptian Stock Exchange will not open on Sunday, as nationwide protests continued for the fifth day in the country.

The Central Bank of Egypt said on Saturday that banks across the country will also be closed on Sunday "to prevent the spread of riots". The central bank also assured people that their savings in Egyptian banks were safe.

The move, according to analysts, could rattle investors looking to trade after unprecedented countrywide protests.

Hisham Ramez, the deputy central bank governor, said the central bank's reserves were strong at $36bn, banks were liquid and any capital flight by foreign investor "hot money" would be short-lived.
   
Egypt has endured five days of often violent protests with people on the streets calling for the resignation of President Hosni Mubarak, who imposed a dusk to dawn curfew and ordered tanks onto the streets to restore order.

'Precautionary measure'
   
Ramez said banks would close on Sunday, adding: "It is just a precaution until banks are ready to start work on Monday."

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He did not comment on the unrest.
   
The stock market benchmark index tumbled 16 per cent in two days after the unrest erupted. The Egyptian pound fell to six-year lows.
   
"Obviously the central bank is worried about a run on the banks which is significant and foretelling about what they are expecting to happen in the next few days. There is a near paralysis," John Sfakianakis, an economist at Banque Saudi Fransi-Credit Agricole, said.
   
Ramez said that, while there could be some short-lived capital flight, the central bank and other Egyptian banks were in a strong position and he was comfortable with reserves.
   
"All the accounts are safe. The liquidity is there. The banks are liquid. The customer accounts are safe. Everything is in order. We have no problem," he said.
   
"We are ready. Our reserves are very strong," he said, adding the bank had not intervened in the currency market in the past week.
   
"We are very comfortable" with reserves, he said.
   
When asked about possible capital flight risk, he said: "Maybe for a short time, for the foreign investors, for the 'hot money', yes. I think things will be back in order soon."

Saudi Arabia's stock exchange also tumbled by over 6 per cent on Saturday, setting the stage for other regional markets to drop as concerns mount over the violent protests in Egypt.

Source:
Agencies
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