Egypt will allocate 20 billion Egyptian pounds ($1.27 billion) to support the stock exchange, President Abdel Fattah al-Sisi said on Sunday, after share prices were battered by the economic impact of the spreading coronavirus.
The government had already announced a raft of measures aimed at protecting the economy against the global repercussions of the spread of the coronavirus, including a 3% interest rate cut, reducing energy prices for industrial users and cutting the tax on company dividends.
Egypt’s blue chip index .EGX30 has plunged over 30% since late February, when coronavirus fears escalated, but it rose 5.9% in trading on Sunday, with 25 of the thirty stocks in the index rising.
Sisi had ordered the allocation of 100 billion Egyptian pounds ($6.37 billion) to finance a “comprehensive” state plan for tackling the disease.
The outbreak – which is having a crippling impact on the global economy – is set to damage Egypt’s vital tourism sector, which accounts for about 12% of gross domestic product.
“From mid-2019 until today, the pressures faced by the global economy and the Egyptian economy have been huge, and believe me … if it weren’t for our reform plan we would not have been able to survive the repercussions,” Sisi said in televised comments.
In 2016, Egypt agreed a $12 billion IMF loan tied to deep economic reforms including a steep devaluation of the pound, deep cuts to its energy subsidies and the introduction of new taxes.
“Now we wish to come out of this crisis with the least damage. The damage here is not economic, no, no, our people are precious to us,” Sisi said.
The country has so far registered 294 cases of the respiratory disease, including 10 fatalities, the health ministry said on Saturday.
Sisi also said that Egypt had enough strategic reserves of basic foods such as rice and sugar and that there was no need for people to rush to stock up.
Supply Minister Ali Moselhy had said last week that the country had wheat stocks sufficient for 3.5 months of consumption ahead of the local harvest season, as well as months-long stocks of vegetable oils, sugar and rice. ($1 = 15.70 Egyptian pounds)