Egyptian Banks May BeConsidering Taking TheirMoney out of America

After the decision of the United States Federal Reserve to reduce the interest rates on deposits to zero, many Egyptian bankers are considering withdrawing most not all of their investments from the States and reinvesting them here.

Apparently, the bankers were not talking about private Egyptians’ deposits in the U.S., but the deposits the Egyptian banks have made in American banks and money markets that collapsed disastrously late last year. Egyptian and Arab investments in the U.S. were encouraged by the good potential returns on the money market there, as well as the interest on American treasury bills.Now these deposits have been frozen, what’s to prevent the money coming home, where the Egyptian banks offer depositors high interest rates?

Even better, the money could be invested in vitally needed development projects in Egypt. The global financial crisis has affected the Egyptian Stock Exchange, with many foreign investors withdraw-ing their money, despite the fact that the economy here is stable and no one’s gone bankrupt. So why should the Egyptians and Arabs keep supporting the US econ-omy, while getting nothing in return? Financing major national development projects is becoming more and more important, because world financial aid to Egypt is expected to drop in 2009 and 2010, as the World Bank recently warned.The return of these funds to Egypt would also reflect trust in the current economic climate and encourage others to follow suit, whether the Egyptian or Arab investors, whom we keep on urging to invest their huge savings in the Arab market, especially in Egypt.The Central Bank of Egypt’s Governor Farouq el-Oqda should courageously decide to retrieve these banking deposits from the States to help protect the economy and reduce inflation.