As demonstrations continued in Egypt and the nation's banks remained closed, Moody's downgraded five of the nation's banks Wednesday morning and said they were on review for additional downgrades. Also Wednesday, the United Arab Emirates' central bank announced that it planned to issue new regulations regarding its country's bank fees.
The banks hit by Moody's ratings changes were National Bank of Egypt, Banque Misr, Banque du Caire, Commercial International Bank and Bank of Alexandria. Local currency deposit ratings for some of the banks were also cut by two notches.
Not only Egypt's banks, but its stock exchange, are still closed; banks will not reopen till Sunday, according to a central bank official quoted by Egypt's official news agency MENA. However, Hisham Ramirez, deputy governor for the central bank, said Wednesday that when they opened they would have sufficient funds to carry on business as usual. "The whole banking system will reopen," he was quoted as saying. "They will be ready and liquid and everything."
As for the UAE, according to Reuters, Sultan Nasser al-Suweidi, governor of the UAE central bank, was quoted on the website www.emirates247.com saying, "I agree that banks have increased their fees and commission rates and not interest rates. There is a new set of regulations that are coming, and the central bank will intervene because matters are getting out of control."
Dubai has been plagued by a real estate bubble, and the banks were heavily exposed to debt-ridden state-owned firms. Although liquidity has been improving, private sector loans had fallen for 11 months in a row, ending in October of 2010. UAE interbank rates have fallen since September's restructuring deal by the state-owned Dubai World was closed.
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