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Egypt's foreign reserves enough for 3 months of imports: Minister

Minister of planning Ashraf El-Arabi warns that Egypt's foreign currency reserves – currently at their lowest levels in decade – will only cover three months of national imports

Bassem Abo Alabass, Tuesday 5 Feb 2013
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Egypt's net foreign reserves fall to $13.6 billion (photo: Reuters)

Egypt's net foreign reserves are currently enough to cover only three months of the country's imports, Ashraf El-Arabi, minister of planning and international cooperation, stated on Tuesday.

Earlier the same day, the Central Bank of Egypt (CBE) announced that Egypt's total foreign reserves had dropped by $1.4 billion in January to reach their lowest levels – $13.6 billion – in more than a decade.

The government pays roughly LE5 billion (roughly $746 million) per month on imports, El-Arabi said in a speech at Cairo’s International Book Fair.

According to CBE figures, Egypt’s total import bill in 2012 stood at $58.6 billion.

El-Arabi called on the government to set an "urgent plan" aimed at easing the state's widening budget deficit and raising foreign reserve levels by June of this year.

He went on to point out that talks between Egypt and the International Monetary Fund over a proposed $4.8 billion loan were currently on hold until the government modified its economic reform programme.

"Egypt's decreasing foreign reserve levels raise serious concerns about the country's fiscal situation," former finance minister Hazem El-Beblawi told Ahram Online.

"As long as the government fails to set limits on needless imports, it will be unable to equalise its balance of payments," added El-Beblawi.

Economists put Egypt's total luxury imports at roughly $4 billion per year.

"I can't say we're on the brink of collapse, but the real problem is that Egypt lacks the domestic resources that would allow the government to deal with anticipated shortfalls," he said.

El-Beblawi went on to say that the proposed IMF loan would help restore the CBE's dwindling foreign reserves and offset the government's widening budget deficit.

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Noha Bayoumy
06-02-2013 07:02pm
Economic reform
Yet there's always enough money to import tons of tear gas and new uniforms for the conscripts.
Comment's Title

06-02-2013 12:18pm
the start....
So, we are on the verge of collapse, The IMF loan of 4.8 billion would actually only pay for one month's payments, as Egypt pays out 5 billion every month!! And yet still we are lied to... One minister says "reserves are up" after getting from Qatar... but we now see this is not the truth. We need serious help from intellectuals, who know about the system, because as we can see, things are just getting worse, not people doing jobs that they are not qualified to do. The fact that in the last days of Mubarak, reserves were 30 billion and now 2 YEARS LATER they are at the lowest, tells us that the current government is having problems...
Comment's Title
07-02-2013 03:44am
let`s start
It all startet with the ghanzoury that has spent money like a drunken sailor. Mursi too had to spend on pay increases since the media told him so. But the main reason is the political instability. The Opposition is just irresponsible in it`s calling for protests every week. I agree with Adul Bari Atwan that the gulf states and the US want to bring the current government down. And they use the opposition to do so.

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