Egyptian banks will only feel small effects of the U.S. credit downgrade, according to an Egyptian banking expert. "Egyptian banks will be affected slightly by U.S. credit downgrade. It will not reduce Egyptian banks' investment in US treasury bills or bonds,” said former regional director of Mashrek bank, Mohamed Badra. The U.S. debt rating was recently downgraded by credit-rating agency Standard and Poor's from AAA to AA+. Badra said foreign cash reserves reached $25.7 billion (EGP 153.2 billion) at the end of July 2011. The Egyptian Central Bank invests 50 percent of this reserve in US treasuries. China invests more than U.S. $2 trillion (EGP 11.9 trillion) in US treasury bills and bonds, according to Badra. Badra praised the National Bank of Egypt (Bank Ahly) for injecting five billion EGP (U.S. $838.9 million) into the Egyptian market to pay governmental debts to constructions companies. Badra asked Egyptian banks to launch initiatives aiming to stimulate the Egyptian economy, particularly during this difficult phase. Dr. Salah Goudat, head of the Center of Economic Studies has called on Egyptian government to recall Egyptian funds in US treasuries and place them in safer investments.
