Home » Business » These are our expectations for Egypt’s economy and the IMF loan

These are our expectations for Egypt’s economy and the IMF loan

Last updated: Sunday 24 Ramadan 1441 AH – May 17, 2020 KSA 15:24 – GMT 12:24
Posted on: Sunday 24 Ramadan 1441 AH – May 17, 2020 KSA 14:18 – GMT 11:18

Source: Dubai – Arabic.net

Mohamed Abu Pasha, chief macroeconomic analyst at EFG Hermes, said that the central bank’s decision to cut interest rates was an expected decision because there was a significant decline in interest rates, which occurred in March with 300 basis points in one go.

He explained that “there were no developments that require any change in interest rates at present, especially in light of the government and the central bank seeking international loans to bridge the expected financing gap from the Corona virus.”

He pointed out that Hermes expects that inflation will stabilize at the level of 6 and 7%, which is the same previous expectations, because the decline in demand will limit the presence of any inflationary wave.

He pointed out that Hermes estimated the financing gap at 10 billion dollars, due to its expectation that the virus and its effects will continue until the end of the year, and there will be a gradual recovery in 2021.

He pointed out that the revenues of the tourism sector may be non-existent and the remittances of workers abroad and the Suez Canal .. And thus the gap between 10 to 12 billion dollars.

Cashier loan

He pointed out that the new International Monetary Fund loan through the credit preparedness mechanism, according to a new program, will be for one year.

The program is not expected to include new harsh measures, because the most difficult measures have been taken in the previous program.

He stated that the program’s focus will be mainly on making sure economic indicators return to what they were before the crisis.

Egypt had obtained 2.77 billion dollars from the International Monetary Fund through the rapid financing mechanism, but the authorities applied for another loan according to the credit preparedness mechanism, and its value could be up to twice the first loan.

Foreign graduates

He explained that despite the exit of $ 17 billion in foreign investment in government debt instruments during March and April, Abu Pasha expects the dropout rates to decrease, indicating that in March the month of March saw investments out of $ 14 billion, but in April it fell to $ 3 billion, in Relative calm remained in global markets.

He expected Egypt’s foreign exchange reserves to stabilize with the Central Bank at 36 to 37 billion dollars in the coming period.

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