- Middle East/North Africa
Finance Minister Morsy Hegazy said that with the government’s economic reform program the Egyptian economy will be able to overcome the current financial crisis.
The ministry’s estimates indicate that the tax amendment package and measures taken to rationalize energy subsidies, along with efforts to boost investment through financial tools like sukuk (Islamic bonds) will amount to savings for the state budget of LE31.2 billion during the current fiscal year, representing 1.8 percent of the gross domestic product. This could increase to LE104 billion during the year 2013/2014, representing five percent of the gross domestic product
The greatest part of saved resources will go toward reducing state budget deficit, Hegazy said.
Regarding the Islamic bonds draft law submitted by the government in December, the minister said he is keen on issuing the law after achieving consensus on its articles among political parties and al-Azhar. During the past two weeks, the ministry made several amendments on the law so that it would include all governmental and private bonds.
Regarding fears voiced by al-Azhar that the law would put public assets in danger so that would be rented or ownership transferred, Hegazy said the amended text includes article 5, which specifies that state assets cannot be sold
The Egyptian central bank offered US$75 million to banksat its 12th foreign currency auction on Sunday, the same amount it offered at the last auction on Thursday.
The auctions are part of a shift in currency policy announced in late December and designed to save the country's foreign reserves, which have fallen to a critical level. Last week, the bank held three sales instead of daily auctions.
The Egyptian pound has weakened by about 3.8 percent on the interbank market since the end of December to reach 6.6028 to the US dollar.