Morning Wrap: Egypt/IMF, Egypt/Oil, Saudi Aramco Hacked

Egypt may ask for $4.8 billion from the International Monetary Fund when its head visits the country next week.

Bumping up the original ask by $1.6 billion from the original $3.2 billion comes across as opportunistic considering the government has failed to secure a penny from the IMF since it first started negotiations last year. But Egypt could certainly use the cash. Some of the clauses that the IMF have given for a loan agreement is broad political support, cutting wasteful subsidies and some devaluation of the currency.

It seems the government has responded by preparing a brand new “socially just” economic programme which it will present to the IMF as part of negotiations, according to an economic adviser to the president, though no details are given.

If you’re wondering why Qatar is spending so much money in North Africa, (aside from trying to become the biggest economic force in the region), here is a good round-up.

Egypt’s finance ministry has re-started a disbursal programme to the oil ministry to help it fund petroleum imports.

Yesterday, in an emailed statement, Momtaz El Saied said the ministry allocated $100 million for fuel purchases to ensure adequate supplies and took “urgent steps” to ensure that other commodities are available. That brings total funds extended to the oil ministry to $600 million since the start of the current fiscal year (which began July 1).

It also brings the total allocated since 2010 to $5.7 billion, the statement says.  These disbursals have come at a faster and more frequent pace to make up for fuel shortfalls in Egypt.  It’s another problem that stems from wasteful energy subsidies.

Egyptian investment bank EFG Hermes posted a net profit of EGP27 million for the second quarter, a two-thirds decline from a year earlier

Saudi Aramco says virus shut down its network

BNP Paribas will try to sell its Egyptian unit, weeks after Greece’s Piraeus Bank tried to sell its Egypt unit and failed.

Gulf consumers feel commodity pinch: “Food producers and consumers in the Middle East are expected to feel the sting of rising commodity prices, as a six-year low in American corn production and weak grain harvests in Russia and India strain supplies,” Tom Gara writes in this Financial Times article.  

While the rapid rise in global commodity prices over the past two months has raised fresh fears over food inflation in most Arab countries, economists at Capital Economics think otherwise.

“We think that the bigger concern could be the balance of payments positions of some of the resource-poor Arab countries. For the oil-rich economies, the increase in agricultural prices is offset by higher hydrocarbon prices. But for the resource-poor countries, a pick-up in both crude oil and agricultural prices is a double whammy,” Capital Economics says.




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