Egypt not out of the woods after IMF rescue deal - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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Egypt’s finances remain in a precarious state despite two major currency devaluations this year and a brand new $3 billion International Monetary Fund rescue package, economists say.

The International Monetary Fund logo is seen outside the headquarters building in Washington, US, September 4, 2018.The International Monetary Fund logo is seen outside the headquarters building in Washington, US, September 4, 2018.

Foreign exchange traders, meanwhile, seem convinced it will be 28 to the dollar this time next year and Japanese bank Nomura has just put Egypt top of its list of countries at high risk of a currency crisis. read more . “Egypt has got a high debt load and arguably it is more vulnerable even than Pakistan in terms of debt payments as a share of revenues,” said Renaissance Capital’s chief economist Charlie Robertson.

This is partly because of the government’s reluctance to raise the interest rate — or yield — on the bills above the rate of inflation, particularly when another sharp currency devaluation is being priced in.Egypt’s swollen current account deficit and $33.9 billion of international debt payments due for the three years to mid-2025 leave Egypt vulnerable, ratings agency Fitch said this month when it slapped a downgrade warning on the country’s credit rating.

Farouk Soussa, an economist at Goldman Sachs, said a backlog of corporate demand for foreign exchange and tight liquidity in the system would continue to push the pound weaker if it were allowed to trade freely.

Source: News Formal (newsformal.com)

 

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