The Role of the Central Bank in Banking Sector Development and its Impact on Economic Growth in Egypt over the period (1990 – 2023)

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This study aims to demonstrate the reforms implemented by the Central Bank of Egypt from 1990 to 2023 and their role in developing the banking sector. It seeks to empirically examine the impact of this development on economic growth. The study explores the various stages of the evolution of the Egyptian banking sector and utilises an econometric time series model, specifically the Autoregressive Distributed Lag (ARDL) model, to measure the impact of banking sector development on economic growth in Egypt. It also employs the Bounds Testing Approach to assess the existence of a long-run relationship between the variables under consideration, as stipulated by theory. Additionally, the Error Correction Model (ECM) is used to capture the short-run relationship. The key results reveal that banking sector development has a positive effect on economic growth in Egypt in the long run. Furthermore, the short-run impact of banking sector development on economic growth aligns with the long-run impact.

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