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03/12/2011
Cairo - Reuters
Said a senior finance official said the Egyptian foreign reserves of Egypt descend by a third to $ 15 billion by the end of January and the budget deficit will rise further, which may require revision to support gasoline and other materials.
Reserves have fallen since the uprising that toppled Hosni Mubarak, as the flight of foreign investment and tourists aversion hurt two of the main sources of hard currency in Egypt. The central bank has announced that the volume of reserves reached $ 22 billion at the end of October, a level economists said that he does not allow much room for movement in the face of currency crisis looming on the horizon.
Major General Mahmoud Nasr, Member of Supreme Council of the Armed Forces and Assistant Secretary of Defense for financial and accounting at a press briefing on the economy that foreign reserves will fall by the end of January (January) next to the $ 15 billion. He pointed out that only ten billion dollars of reserves will be available because of the benefits of a list of five billion dollars to payments to foreign investors and other obligations.
Has dropped the pound to its lowest levels in seven years and predicted economists to continue to decline in 2012 unless the new government can restore confidence quickly in a country that was a favorite destination for foreign investors even saw a popular uprising this year, and analysts say that allowing a fall is slow and is governed by the pound may stimulate growth and reduce the pressure for further reduction of its value. But it may be too late to take this step without causing panic in the currency market instability. Nasrallah said that there was a plan to the authorities in relation to pound against the dollar, and the mechanisms of the central bank will not allow further decline of the pound.
Preferably industrialists devaluation of the pound to make exports more competitive, but they say it should have started long time ago.
Said Simon Kitchen, an analyst at no. F-.-Hermes "The market has become more aware of the dangers of currency during the past few months, rising borrowing costs of local and accelerated erosion of reserves.", And the government refused to facilitate the funding of three billion dollars from the International Monetary Fund. The finance minister said at the time that Egypt will go to local sources of funding and that the army does not want to increase the debt.
Nasrallah said "I do not want to ask for loans to foreign .. and means the only useful is to rely on ourselves, have been presented to us bodies and foreign government loans, but the political conditions." He added by saying that the public support necessary for the new government being formed now to succeed in developing a policy to address Egypt's economic problems.
The current Finance Minister said that Egypt is willing to request loans from the IMF again, but Nasrallah's comments reflect unease army of borrowing.
Nasrallah said that the deficit in fiscal year 2011 / 2012 is expected to jump from the figure that initially the government expects a 133 billion pounds (22 billion dollars), or 8.6 percent of GDP. He noted that the deficit will jump now to 167 billion pounds in fiscal year 2011 / 2012, a level economists said that 11 per cent of GDP.
Nasrallah said "There are several solutions (to address the deficit problem).. One is to review the support, especially support for gasoline. We would prefer not to borrow money from abroad, Loans comes with conditions weakening of state sovereignty, and pointed out that Egypt spent LE 19 billion on subsidies for food and five billion pounds to support the electricity. Economists are skeptical about the ability of the Egyptian banks to close the deficit without foreign funding. The fuel subsidies between 20 and 25 percent of the total State expenditure.
Nasrallah stressed that the negotiations for funding from Gulf Arab states have so far only a billion dollars in support of the budget. He said, "We have not received only a billion dollars from the Gulf, Saudi Arabia and Qatar. There is no other money coming to Egypt."
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Cairo - Reuters
Said a senior finance official said the Egyptian foreign reserves of Egypt descend by a third to $ 15 billion by the end of January and the budget deficit will rise further, which may require revision to support gasoline and other materials.
Reserves have fallen since the uprising that toppled Hosni Mubarak, as the flight of foreign investment and tourists aversion hurt two of the main sources of hard currency in Egypt. The central bank has announced that the volume of reserves reached $ 22 billion at the end of October, a level economists said that he does not allow much room for movement in the face of currency crisis looming on the horizon.
Major General Mahmoud Nasr, Member of Supreme Council of the Armed Forces and Assistant Secretary of Defense for financial and accounting at a press briefing on the economy that foreign reserves will fall by the end of January (January) next to the $ 15 billion. He pointed out that only ten billion dollars of reserves will be available because of the benefits of a list of five billion dollars to payments to foreign investors and other obligations.
Has dropped the pound to its lowest levels in seven years and predicted economists to continue to decline in 2012 unless the new government can restore confidence quickly in a country that was a favorite destination for foreign investors even saw a popular uprising this year, and analysts say that allowing a fall is slow and is governed by the pound may stimulate growth and reduce the pressure for further reduction of its value. But it may be too late to take this step without causing panic in the currency market instability. Nasrallah said that there was a plan to the authorities in relation to pound against the dollar, and the mechanisms of the central bank will not allow further decline of the pound.
Preferably industrialists devaluation of the pound to make exports more competitive, but they say it should have started long time ago.
Said Simon Kitchen, an analyst at no. F-.-Hermes "The market has become more aware of the dangers of currency during the past few months, rising borrowing costs of local and accelerated erosion of reserves.", And the government refused to facilitate the funding of three billion dollars from the International Monetary Fund. The finance minister said at the time that Egypt will go to local sources of funding and that the army does not want to increase the debt.
Nasrallah said "I do not want to ask for loans to foreign .. and means the only useful is to rely on ourselves, have been presented to us bodies and foreign government loans, but the political conditions." He added by saying that the public support necessary for the new government being formed now to succeed in developing a policy to address Egypt's economic problems.
The current Finance Minister said that Egypt is willing to request loans from the IMF again, but Nasrallah's comments reflect unease army of borrowing.
Nasrallah said that the deficit in fiscal year 2011 / 2012 is expected to jump from the figure that initially the government expects a 133 billion pounds (22 billion dollars), or 8.6 percent of GDP. He noted that the deficit will jump now to 167 billion pounds in fiscal year 2011 / 2012, a level economists said that 11 per cent of GDP.
Nasrallah said "There are several solutions (to address the deficit problem).. One is to review the support, especially support for gasoline. We would prefer not to borrow money from abroad, Loans comes with conditions weakening of state sovereignty, and pointed out that Egypt spent LE 19 billion on subsidies for food and five billion pounds to support the electricity. Economists are skeptical about the ability of the Egyptian banks to close the deficit without foreign funding. The fuel subsidies between 20 and 25 percent of the total State expenditure.
Nasrallah stressed that the negotiations for funding from Gulf Arab states have so far only a billion dollars in support of the budget. He said, "We have not received only a billion dollars from the Gulf, Saudi Arabia and Qatar. There is no other money coming to Egypt."
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