Egypt’s reserves tumbled $1.1 billion to $14.42 billion in July, from $15.53 billion in June after the country had to repay maturing Egyptian bonds and Paris Club debt totaling some $1.64 billion. Signals fragility in Egypt’s macroeconomics and a “reminder that devaluation of the pound remains a real and likely prospect”, economists at Capital Economics wrote in a note yesterday.
With reserves falling to dangerously low levels, “net FX reserves are not enough to cover three months worth of imports – the minimum recommended by the IMF”, the economists’ write. Against this backdrop, this month’s visit from the IMF will be imperative.
Egypt wants to bolster economic ties with Libya, statement from the finance ministry said yesterday after Egypt’s Finance Minister Momtaz al- Saied met with his Libyan counterpart Hassan Zilkam.
It is also worth noting that the president Mohamed Morsi yesterday met with Ahmed Ali Madani, the chairman of the Islamic Development Bank in Saudi Arabia which last month provided $1 billion in financing for Egypt. This is one of Morsi’s more strategic meetings, and reflected well in this Arabic press report from Al Ahram this morning, where IDB’s Madani agrees to pump another $250 million into the Helwan power station to boost investments in electricity, which is at peak levels.
But all this help from Saudi Arabia is starting to drag on the kingdom’s economy, according to an IMF report out yesterday that said Saudi Arabia is spending more than it should.
Partly in response to unrest in the Arab world, Saudi Arabia boosted spending to a record 804 billion riyals ($214 billion) in 2011, 39 percent more than initially planned and 23 percent higher than in 2010, its fastest growth in a decade.
Arabtec, the biggest builder in the United Arab Emirates, swung to a second quarter loss as costs and expenses increased. Abu Dhabi government-controlled Aabar Investments raised its stake in Dubai-based Arabtec this year to 21.6% , prompting a surge in the shares.
Telecom Egypt, the Arab country’s fixed-line monopoly, said second quarter results dropped 25% on higher salary costs
Political turmoil dragged Kuwait’s stock market to a 7 month low after members of the parliament boycotted a session of the country’s assembly.