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Thursday, 11 May 2017

FX problems in Egypt starting to fade -Bloomberg

The easing of bank restrictions on credit card usage abroad is another sign that the foreign exchange problems “have finally been dealt with and started to fade,” Capital Economics’ Jason Tuvey tells Bloomberg. “We’ve seen a sharp increase in foreign-exchange reserves, and there’s been a flow of [USD] that was in the black market moving into the official banking system,” he adds. So far, CIB, Banque Misr, National Bank of Egypt, and HSBC have removed caps on credit card usage abroad. Bloomberg notes, however, that the economic recovery is “far from complete,” citing a BMI research saying reform measures are expected to weigh on economic growth as “rising investment will not be sufficient to offset the negative impact of high inflation on private consumption.” BMI added that while inflation has likely peaked, measures including subsidy cuts will continue to squeeze consumers and businesses.

…Separately, foreign investments in Egyptian government securities rose to EGP 103.6bn as of 9 May, said Sami Khallaf, the head of public debt at the Finance Ministry, according to Reuters.

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