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WB to vote on loan of $500 mln for Upper Egypt on Sept. 17
Minister of International Cooperation Sahar Nasr announced in a press conference Wednesday that the World Baank (WB) will vote on a $500-million loan to Egypt for development of industrial areas in Upper Egypt on September 17, Youm7 reported.
Egypt’s dollar black market resilient despite new threat of jail terms
(Reuters) Desperate to elude roving financial police and fearful of new jail terms for black-market money-changing, Egypt’s currency traders are driving with bags of cash to meet clients in discreet locations around the vast capital Cairo.
“The company I used to work for is shut down so now I work from the streets. Many people are worried but only the brave like me are still working,” a trader told Reuters by telephone while on his way to buy dollars from clients in Cairo.
Starved of hard currency since a 2011 uprising and an ensuing surge in violence and instability that have scared off many foreign tourists and investors, Egypt has been fighting a black market for dollars in which the divergence from the official central bank rate has widened to more than 40 percent.
Egyptian authorities have blamed exchange bureaux for the crisis and have arrested traders, shut dozens of outlets and revoked the licenses of those found to be trading far beyond the official rate of 8.78 pounds to the dollar.
On Aug. 9, parliament set prison sentences of up to 10 years and fines of up to 5 million pounds for traders selling foreign currency at black market rates. Previously there were no prison sentences or fines set for violators.
Despite the intensifying crackdown, traders say the black market remains active and resilient behind the scenes.
“There is difficulty in making transactions and there are big risks, but with those increased risks come the increase in profit and that is why this market will keep working. One way or another, it will continue in unofficial locations,” said one exchange bureau manager, who like others asked for anonymity.
“The gaps in prices are big and that is because of the security crackdown. This market is now a market of fear. The price (for dollars) edged down but now it is rising again because the demand is strong while supply is less.”
WIDE VARIANCE IN PRICES
The price of dollars now varies from one trader to the next by up to 50 piasters as communication between bureaux has gone quiet in response to intensified surveillance.
Four traders this week offered a varied 12-12.5 per dollar range to buy dollars and a range of 12.5-12.7 per dollar to sell. They did not divulge their volume of trade.
“I don’t believe the crackdown will help reduce the parallel market rates,” said Hany Farahat, economist at CI Capital.
“On the contrary, excessive regulation will increase the opportunity cost of engaging in unofficial transactions and push traders to charge a higher fee, and therefore increase the parallel market premium.”
Egypt devalued its currency by nearly 14 percent in March to close the gap with the black market rate – but in vain given the acute shortage of foreign currency.
Net foreign reserves have shrivelled by more than half since 2011 to $15.536 billion as of last month – enough for less than three months of imports even as Egypt has kept the pound artificially strong through weekly dollar sales.
The crackdown aims to deter demand for black market dollars and channel them back into bank coffers, but it has done little to increase dollar holdings, bankers said.
“The more they set barriers in the market the more ineffective they turn out to be. Currency traders are still trading but off the premises that are being monitored, selling to their big clients,” one banker said. Egypt, he added, needs to find effective solutions to its dollar liquidity problem.
President Abdel Fattah al-Sisi’s government has just struck a preliminary deal with the IMF for a three-year, $12 billion lending programme that it hopes will restore market confidence and lure fresh investment to ease its currency crunch.
Egypt’s stocks fall slightly on Wednesday open due to profit taking
The Egyptian Exchange (EGX) opened Wednesday’s session collectively down, hurt by profit taking, Youm7 reported.
The main benchmark index EGX30 declined by 0.04 percent while the Mid- and small-cap index EGX70 dropped 0.08 percent, while the price index, EGX100 declined by 0.07 percent.
Egypt’s production of ethan propane mixture soars by 19% in July
Egypt’s production of ethan propane mixture increased by 19 percent in July to reach 67,900 tons, compared to 57,000 tons during the same period a year earlier, Sources at the Egyptian Natural Gas Holding Company told Youm7 on Wednesday.
The average daily production reached 2,262 tons in June this year compared to 1,842 tons a month earlier, according to the source.
The company produces the ethan propane mixture, used to produce ethylene, polyethylene, butadiene, and other derivatives, from its Western Sahara gas complex in Alexandria.
On Saturday, President Abdel Fatah al Sisi inaugurated the long planned complex of the Egyptian Ethylene & Derivatives Co. (Ethydco.)
The new plant is expected cover 45 percent of Egypt’s domestic market needs of ethylene, high-density and low-density polyethylene, butadiene, and other derivatives, Petroleum Minister Tarek al Mulla was quoted by Youm7.
Egyptian pound steady at Wednesday auction
The Central Bank of Egypt has kept the pound steady against the US dollar at its official foreign currency auction on Wednesday, data from the bank showed.
The bank sold $118 million at the unchanged rate of 8.88 per dollar.
Egypt to sign $2.4m grant agreement with MENA transition fund
International Cooperation Minister Sahar Nasr will sign a cooperation protocol on a grant worth $2.4 million with officials from the Middle East and North Africa Transition Fund on Wednesday, Youm7 reported.
The grant aims to support the implementation of sustainable development projects carried out by the country’s private sector. It is also funded by the European Bank for Reconstruction and Development (EBRD,) a well-informed source told Youm7.
The fund aims to improve the lives of citizens in transition countries, and to support the transformation currently underway in several countries in the MENA.
Egypt’s telecom regulator to send out final 4G licence terms on Sunday
(Reuters)-Egypt’s telecoms industry regulator has approved the final terms for 4G mobile broadband network licences and will send the forms out to licensee companies on Sunday, a senior official at Egypt’s Telecommunications Ministry told Reuters.
“The telecom regulator approved the final terms of the 4G licences yesterday,” the official said, adding that companies would have until midday on Sept. 22 to accept them.
The official said that while the companies that obtain the licences will be granted additional frequencies there will be no change in the pricing or the condition that 50 percent of the payment must be made in U.S. dollars.
146 vessels transit Suez Canal in 3 days: SCA
A total of 146 vessels carrying 8.4 million tons of cargo have transited the Suez Canal Sunday through Tuesday, Youm7 reported citing a statement issued by the Suez Canal Authority.
The number of ships transiting the canal from the Northern Port Said entrance reached 86, with a daily average of 28.7 ships, according to the statement.
The number of vessels that passed through the Southern Suez Canal entrance reached 60, with a daily average of 20 ships.