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Investing.com – The Central Bank of Egypt raised its estimates of the value of installments and interest payable in 2024, reaching $29.229 billion, up from about $28.049 billion last June. This value includes interest payments amounting to $6.312 billion, and debt installments estimated at approximately $22.917 billion. According to the bank’s report on the external situation of the Egyptian economy.
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It requires payment of about $14.595 billion during the first half of 2024, while it is expected to pay about $14.634 billion during the second half of the same year.
In 2025, the value due for payment will decrease to $19.434 billion, as it is expected that about $11.155 billion will be paid during the first half of the year, and about $8.28 billion during the second half of it, according to the report.
The net deficit in foreign assets improved
Egypt saw an improvement in its net foreign asset deficit by 11.1 billion ($360 million) in August, as assets rose to 801.3 billion pounds. This improvement is the second of its kind in two months, according to central bank data.
In July, the deficit shrank by 24.9 billion Egyptian pounds. Most of these improvements were the result of an increase in the net foreign assets of commercial banks.
Withdrawals from foreign assets, which represent the assets of the Central Bank and commercial banks owed by non-residents minus their liabilities, have helped the Central Bank to support the Egyptian currency over the past two years.
In September 2021, the net asset value was 248 billion pounds.
Fund agreement
Meanwhile, Bloomberg reported yesterday that Egypt had removed one of the main concerns that had halted a review of a $3 billion bailout program with the International Monetary Fund, according to people familiar with the matter who spoke to the agency, even as the looming presidential election makes it difficult to meet the crucial demand. Regarding devaluation of the currency.
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The IMF believes Egyptian authorities are becoming more serious about conducting an ambitious sale of state assets after a handful of deals, said the people, who spoke to Bloomberg on condition of anonymity because the deliberations were not made public.
Ziad Daoud, chief emerging markets economist at Bloomberg Economics, noted that with the inflation rate already at a record high, Egypt is unlikely to devalue the currency before the presidential elections in December. But the country may not have sufficient means to maintain the current state for a long time. After the elections, the government will have a choice between allowing the pound to decline, or imposing strict restrictions on imports.
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In December, the IMF approved a loan worth three billion within the framework of the “Extended Fund Facility” for Egypt, which has been under strong financial pressure since long-term problems were exposed due to the economic repercussions of the war in Ukraine.
The provision of payments under the 46-month program is subject to eight reviews. The first review was scheduled to take place in March, but it did not take place amid reports that the Fund was dissatisfied with the progress Egypt had made in meeting the terms of the agreement.
Egypt pledged to adopt a flexible exchange rate when it reached the loan agreement with the International Monetary Fund late last year, but the official rate has remained almost unchanged for about six months at about 30.93 pounds to the dollar.
In June, President Abdel Fattah El-Sisi appeared to rule out further devaluation of the currency in the near term, saying such a move could harm national security and citizens.
2023-09-28 14:09:00
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