Egypt: cash gets scarce as banks stay closed

As the protesters battle it out against the hired thugs in Tahir Square, it’s worth keeping half an eye on the rapid deterioration of the Egyptian economy, too. This from a Nomura report on the situation published yesterday:

Banks will remain closed for the remainder of the work week … Cash is becoming scarce, particularly as many workers have not been able to collect their salaries from the end of January, and concerns are growing about access to food supply in certain areas.

The extended bank closure has begun to raise concerns about deposit runs and extensive demand for foreign exchange, once they do eventually open. And the risk of imposition of capital controls, at least temporarily, has increased. Regular government financing operations have also been interrupted, with the cancellation of a regularly-scheduled treasury-bill yesterday.