Annual growth in broad money supply M2 dropped to 9.6 percent in April, from 9.8 percent in March, mainly due to a drop in foreign currency demand and savings deposits growth, showed data released by the Central Bank of Egypt (CBE). In its daily market report, Beltone Financial said annual growth in M2d, reflecting growth of local currency money supply, remained stable at 14.3 percent in April, for the second consecutive month. M2 growth has been gradually rebounding from its low of 6.8 percent in April 2009, as spending in the economy and incoming inflows increased with the improvement in economic conditions. “We expect money supply growth to fluctuate in the coming months with changes in the foreign exchange market, on one hand, and the increased liquidity in the economy, on the other,” Beltone said. “We do not expect this liquidity, however, to negatively impact inflation in the short term.” In April, annual growth in domestic credit declined to 7.6 percent, from 8.8 percent the month before. Growth in credit to the government declined to 13.9 percent, from 19.1 percent over the same period. On the other hand, annual growth in credit to the private and household sectors continued to rise, registering 2.4 percent and 2.1 percent in April, from 0.8 percent and 1.3 percent, respectively in March 2010.
