Sunday, January 06, 2013

Egypt currency crisis update

REUTERS:  Egypt pound falls half a percent at Sunday FX auction
"Egypt's pound slid by half a percent on Sunday at the central bank's fifth auction of foreign currency, with all $60 million on offer sold to banks at a cut-off price of 6.4185 pounds, the central bank said."

LA TIMES:  Egypt Cabinet reshuffled as economic concerns mount:  President Mohamed Morsi replaces his finance and interior ministers a day before meeting with the IMF over an anticipated $4.8-billion loan.
"The Cabinet changes, which also strengthened the Brotherhood's hold on the government, were announced a day before Morsi was to meet with representatives of the International Monetary Fund over an anticipated $4.8-billion loan to Cairo. Morsi has promised tax increases and food and energy subsidy cuts to prove he is willing to enact unpopular austerity measures..."There is no chance for the president's reshuffle to bring back people's trust in the government and economy," said Magdy Sobhi, a political economist with the Al Ahram Center for Political and Strategic Studies. "While the new finance minister has done extensive research on Islamic finance, he has no political or governmental experience. You have severe budget constraints and debt. The country is in a terrible economic situation."..He added: "If the IMF deal isn't closed quickly, that means we won't be able to obtain loans or aid from other nations. In this situation, bankruptcy is not far off."
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