{"id":586106,"date":"2023-05-07T00:00:00","date_gmt":"2023-05-07T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/05\/07\/net-foreign-reserves-inch-up-to-usd-34-55-bn-in-april\/"},"modified":"2023-05-07T00:00:00","modified_gmt":"2023-05-07T00:00:00","slug":"net-foreign-reserves-inch-up-to-usd-34-55-bn-in-april","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/05\/07\/net-foreign-reserves-inch-up-to-usd-34-55-bn-in-april\/","title":{"rendered":"Net foreign reserves inch up to USD 34.55 bn in April"},"content":{"rendered":"

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Good morning, friends, and welcome to another very busy Sunday to kick off budget week in the House of Representatives. <\/span>We hope you enjoyed your long weekend \u2014 it\u2019s the last such break for our Egypt-based readers until we observe the anniversary of the 30 June Revolution. <\/span><\/p>\n

THE BIG STORY here at home: <\/span>The IMF says Egypt is committed to a flexible exchange <\/span>rate:<\/span> The govern<\/span>ment is <\/span>\u201cserious about having a flexible exchange rate,\u201d the IMF\u2019s director for <\/span>the Middle East, North Africa and Central Asia, Jihad Azour, told <\/span>Asharq Business<\/a><\/span> in an int<\/span>erview last week.<\/span><\/p>\n

But no news on the first review: <\/span>\u201cThere is strong collaboration between the Fund\u2019s team and Egyptian authorities,\u201d Azour said, adding that the government has been \u201cpreparing\u201d for the review since the IMF \/ World Bank Spring Meetings last month. <\/span><\/p>\n

Why this matters: <\/span>Our <\/span>USD 3 bn loan program<\/a><\/span> from the IMF is contingent on implementing reforms that include the move to a \u201cfully flexible\u201d EGP-USD exchange rate and widening private participation in the economy. <\/span>Bloomberg<\/a><\/span> reported last month that the Fund wanted to see us make more progress on those reforms before it goes ahead with the first review of the package, which had been expected in mid-March. The IMF\u2019s executive board should discuss the first review by June, but in the case of a longer delay the lender may combine it with the next one, which is scheduled for September, according to Asharq. <\/span><\/p>\n

A vote of confidence following a string of bad reports:<\/span> Azour\u2019s comments to Asharq come following a series of negative credit reports from the big three rating agencies, which are voicing increasing concern about the speed at which authorities are moving forward with their privatization agenda and the lack of new FX inflows. <\/span>Fitch is the latest to downgrade us<\/span>, as we note in this morning\u2019s news well, below.<\/span><\/p>\n

The first IMF review is just \u201ca matter of time,\u201d Finance Minister Mohamed Maait told El Hekaya last night<\/span> (<\/span>watch, runtime: 31:44<\/a><\/span>). \u201cWe were aiming to schedule the review for March but we were hit with a number of issues, including that it was the beginning of Ramadan \u2026 we are hoping to have the first review before June,\u201d he said. <\/span><\/p>\n

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<\/span>DATA POINT- FX reserves continue to creep up: <\/span>Our net foreign reserves inched up to USD <\/span>34.55 bn in April from <\/span>USD 34.45 bn<\/a><\/span> in March, according to <\/span>central bank figures<\/a><\/span> out last week. Reserves have been on a gentle upward slope the past seven months, after falling 20% last year on the back of the war on Ukraine and tougher financial conditions.<\/span><\/p>\n

WATCH THIS SPACE- Gold and aluminum coming to the EMX this year? <\/span>The EGX <\/span>is looking into adding gold and aluminum to the list of commodities trading on the Egyptian Mercantile Exchange (EMX) during the second half of the year, <\/span>Al Borsa<\/a><\/span> reports, citing unnamed government sources.<\/span><\/p>\n

HAPPENING THIS WEEK-<\/span><\/p>\n

<\/a> <\/span>It\u2019s budget week in the House: <\/span>Finance Minister Mohamed Maait and Planning <\/span>Minister Hala El Said will deliver statements in the House for the draft FY 2023-2024 budget when MPs reconvene on Tuesday. This will kickstart a month of discussions at the House Budget Committee. The budget will then be up for debate and a vote by the House in a plenary session.<\/span><\/p>\n

What we know so far: <\/span>The Madbouly government plans to <\/span>up spending on subsidies and social<\/a><\/span>protection programs<\/a><\/span> to offset the impact of soaring inflation on households, and has <\/span>released its fiscal targets<\/a><\/span> for the coming year. <\/span>The Finance Ministry has penciled in oil prices of USD 90 per barrel for FY 2023-2024, up from <\/span>USD 80 per barrel this fiscal year<\/a><\/span>, House Budget Committee chairman Fakhry El Feky was quoted as telling <\/span>Asharq Business<\/a><\/span> yesterday. <\/span>Cabinet approved the draft budget last month.<\/span><\/p>\n

HAPPENING TODAY- <\/span><\/p>\n

<\/a> <\/span>Arab League to vote on readmitting Syria:<\/span> Arab foreign ministers are meeting <\/span>in Cairo today to discuss ties with Syria, with an anonymous diplomat telling <\/span>CNN<\/a><\/span> that the organization will vote on bringing Damascus back into the fold. This follows <\/span>several rounds<\/a><\/span> of <\/span>talks between Arab diplomats<\/a><\/span> last week aimed at bringing the country back into the league.<\/span><\/p>\n

The pro-Syrians have the votes:<\/span> That\u2019s according to Jordan\u2019s foreign minister, Ayman Safadi, <\/span>who told the US news outlet that he believes the league will vote to readmit Syria today. Should the vote go through, President Bashar Al Assad is likely to be invited to chair the next meeting on 19 May, the anonymous official said.<\/span><\/p>\n

<\/a> <\/span>AND- The Senate reconvenes today after a three-week break:<\/span> The industrial, economic <\/span>affairs, tourism and energy and environment committees are among those holding sessions today.<\/span><\/p>\n

HAPPENING TOMORROW-<\/span><\/p>\n

It\u2019s<\/span> Investment and Sustainable Finance Day:<\/span>The CFA Society is hosting its <\/span>Investment and Sustainable Finance Day<\/a><\/span> tomorrow, featuring a variety of speakers from the International Finance Corporation, CI Capital, and the Financial Regulatory Authority\u2019s Mohamed Farid. <\/span><\/p>\n

HAPPENING NEXT WEEK-<\/span><\/p>\n

<\/a> <\/span>National Dialogue sessions to start next week: <\/span>The first session of the National <\/span>Dialogue will take place on S<\/span>unday, 14 May, member of the board of trustees, Talaat Abdel Qawi, said in a televised interview yesterday (<\/span>watch, runtime: 6:48<\/a><\/span>). Sessions will be held every Sunday, Tuesday and Thursday, he said.<\/span><\/p>\n

The National Dialogue was inaugurated on Wednesday:<\/span> We have the story in this morning\u2019s <\/span>news well, below.<\/span><\/p>\n

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