IMF delegates to Egypt agree on 3rd review of economic reform

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CAIRO – 18 May 2018: The International Monetary Fund’s (IMF) delegation to Egypt announced that it has reached a staff-level agreement on the third review of Egypt’s economic reform program after a 16-day visit to Cairo.

The IMF issued a statement on Thursday that the staff-level agreement is subject to approval by the IMF’s Executive Board, adding that the completion of this review means the payment of a further $2 billion, bringing total disbursements under the program to $8 billion of a $12 billion loan agreement. Egypt has received the third tranche of the loan in December 2017.

The statement noted that “Egypt has begun to reap the benefits of its ambitious and politically difficult economic reform program. While the process has required sacrifices in the short-term, the reforms were critical to lay the foundation for strong and sustained growth that will improve living standards for all Egyptians.”

“Egypt’s growth has continued to accelerate during 2017/18, rising to 5.2 percent in the first half of the year from 4.2 percent in 2016/17. The current account deficit has also declined sharply, reflecting the recovery in tourism and strong growth in remittances, while improved investor confidence has continued to support portfolio inflows. In addition, gross international reserves rose to $44 billion by end-April, equal to 7 months of imports,” the statement read.

The delegation pointed out that Egypt’s annual inflation has declined to about 13 percent in April compared to 33 percent in mid-2016. They added that the country’s budget for 2018/19 targets a primary surplus of 2 percent of GDP, which would keep public debt on a firmly downward path.

The IMF delegation expressed its gratitude to the Egyptian authorities and the technical teams in the Central Bank of Egypt (CBE) and the ministry of finance for “their openness, candid discussions, and hospitality” during the team’s visit.

Egypt embarked on a bold economic reform program in 2014 that includes cutting energy subsidies and introducing new taxes to cut the budget deficit.

It floated its local currency in November 2016, after which it clinched a $12 billion loan from the IMF. Foreign reserves have been increasing since then. Reserves were only $19.041 billion at the end of October 2016.

Foreign currencies’ balance in Egypt’s international reserves increased to $40.5 billion in April, up from $39 billion in March, increasing by LE 23 billion in one month, according to data from the CBE.

Egypt’s foreign reserves reached $44.03 billion in April for the first time in history, compared to $42.61 billion at the end of March, according to the CBE.

The reserves are expected to further grow over the coming two years to reach $50 billion, banking sources said Wednesday.

They said that the reserves will be buoyed by tourism revenues, Egypt’s Eurobonds issuance, foreign direct investments and the savings from natural gas imports.

Egypt imports goods with an average of $5 billion monthly, meaning that the current reserves will cover around eight months of imports.

The international reserves in Egypt consist of a basket of five main currencies, namely, U.S. Dollar, Pound Sterling, Euro, Japanese Yen and Chinese Yuan.


Source :  Egypt Today

Egypt studies effect of new oil price on budget

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Minister of Finance Amr El-Garhy - File photoMinister of Finance Amr El-Garhy – File photo

CAIRO – 18 May 2018: The Egyptian government is studying the effect of the rise of global oil price on the new budget of fiscal year 2018/2019, as oil is one of the external influences on the budget, Minister of Finance Amr el-Garhy said.

“We will see if we can increase our revenues from other sources,” Garhy added in a press conference.

Oil prices reached $80 per barrel on Thursday for the first time since November 2014.
Garhy clarified that the price of oil increased due to the regional factors, including the United States withdrawal from the Iranian nuclear agreement.

The Iran nuclear deal was a preliminary agreement reached in 2015 between the Islamic Republic of Iran and a group of world powers, including the permanent members of the United Nations Security Council; the United States, the United Kingdom, Russia, France, China and Germany and the European Union.

Trump announced the withdrawal from the agreement, saying “It is clear to me that we cannot prevent an Iranian nuclear bomb under the decaying and rotten structure of the current agreement.”

“The Iran deal is defective at its core. If we do nothing, we know exactly what will happen,” Trump added.

He stressed on the government’s commitment to the reports of international banks.

The new Egyptian budget for fiscal year 2018/2019 targets revenues of LE 990 billion, and expenditures of LE 1.4 trillion.

It also seeks to lower the unemployment rate to 10.4 percent with an inflation rate of 13 percent.

Egypt targets a budget deficit of 8.4 percent of gross domestic product (GDP) in the new budget with a GDP growth of 5.8 percent, up from 5.2 percent in the current fiscal year, and investment worth LE 100 billion, up from LE 70 billion in the current budget.


Source :  Egypt Today

Egypt’s military kills 19, arrests 20 in Sinai operation

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May 17, 2018
2:20 pm

Egypt’s military and police forces have killed 19 militants in an exchange of gunfire and arrested 20 suspects, in a continuing crackdown in Sinai, the military said in a statement on Thursday.

Security forces launched a large-scale security operation in February to crush militants who have waged an insurgency that has killed hundreds of security forces and residents over many years.

The statement said the militants were killed over the past few days.

Their deaths bring the total of those killed since the beginning of the operation to at least 296 including 35 military personnel, according to Reuters calculations based on military statements.

Militants in Sinai intensified their attacks after the ousting by President Abdel Fattah al-Sisi and the military in 2013 of Egypt’s first freely elected president, Mohamed Mursi of the Muslim Brotherhood.

Defeating Islamists and restoring security after years of unrest that followed Egypt’s 2011 popular uprising has been a promise of Sisi, who was re-elected in March in a landslide victory against no real opposition.


Source :  Egypt Independent

Egypt’s Sisi orders Gaza border opened for Ramadan: Twitter account

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Egyptian President Abdel Fattah al-Sisi ordered on Thursday that the Rafah border crossing with the Gaza Strip be opened for the whole of the Muslim holy month of Ramadan, he said on his official Twitter account.

The border with the Palestinian territory is mostly shut but opens at regular intervals. This would be the longest single opening in years.

Sisi’s Twitter account said the opening of the crossing would “alleviate the burdens of brothers in Gaza.”

Israeli troops killed dozens of Palestinians on Monday who protested on the Gaza border as the United States opened its embassy in Jerusalem, moving its diplomatic mission in Israel to the contested holy city from Tel Aviv.

Islamist group Hamas controls Gaza, but not its most important crossings, Rafah with Egypt and Erez with Israel. It handed control of those crossings late last year to its rival, the West Bank-based Palestinian Authority, in a reconciliation deal signed in Cairo.

Egypt closed the border for long periods after attacks on Egyptian security forces in the Sinai Peninsula that increased in 2013, with Egyptian officials blaming Palestinian militants from Gaza for some of them.


Source :  Egypt Independent

French police foil ricin terror plot and arrest Egyptian brothers

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Police in France have foiled a suspected terror attack and arrested two brothers of Egyptian origin, French Interior Minister Gerard Collomb said on Friday.

“There were two young people of Egyptian origin who were preparing to commit an attack, with either explosives or ricin, this very powerful poison,” the minister said on BFMTV.

“They had tutorials that showed how to make ricin-based poisons,” Mr Collomb said, adding that they had communicated via the Telecom encrypted messaging app.

The revelation came after a 29-year-old man was killed and five other people injured in a deadly knife attack in Paris last Saturday night.

Collomb did not indicate when they were arrested, but a source close to the inquiry said they were detained in the northern 18th Arrondissement of Paris on May 11, the day before Khamzat Azimov carried out his knife rampage.

One of the men “admitted having wanted to stage an attack,” the source told AFP.

Azimov also lived in the 18th Arrondissement, parts of which are packed with low-income high-rises and a mix of French and immigrant communities.

In late March, Prime Minister Edouard Philippe had indicated that a total of 51 attacks had been thwarted by French security services since January 2015, the beginning of a wave of strikes on French soil, many claimed by the Islamic State group.

A total of 246 people have been killed in attacks since then.


Source :  Egypt Independent