An Egypt For Tomorrow
Bloomberg Businessweek Middle East|February 16, 2017

Hassan Abdalla CEO, Arab African International Bank (AAIB).

Sudeep Guha
An Egypt For Tomorrow

How has the currency situation in Egypt affected operations and what do you think the long-term impact will be of the free-floating Egyptian pound?

In any economy, currency depreciation instantly hits consumer purchasing power and reduces wages. However, these adjustments are necessary to structurally address the economy and trigger latent growth potential.

By allowing the Egyptian pound to weaken, Egyptian assets are now much cheaper and more attractive for foreign investors. There are already signs that foreigners are taking interest in the country’s financial markets. Stock exchange figures show that foreign investors have made large net purchases of Egyptian stocks since the pound was floated. About EGP2.8 billion ($176 million) of overseas funds flew into the country’s stocks in November. Additionally, total proceeds from debt instruments amassed a total of $700 approximately million.

Apart from de-pegging the Egyptian pound from the US dollar, a number of measures have been taken by Egypt to rectify its fiscal deficit, including introducing VAT and progressive taxes, slashing the public sector wage bill, and the lifting of fuel subsidies - all prerequisites for approval of the IMF loan. The move was applauded by Global Rating Agencies, which reaffirmed Egypt’s B-/B long and short-term sovereign credit ratings and revised the outlook from negative to stable.

What will be the impact of the recent IMF loan?

この記事は Bloomberg Businessweek Middle East の February 16, 2017 版に掲載されています。

7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。

この記事は Bloomberg Businessweek Middle East の February 16, 2017 版に掲載されています。

7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。

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