A number of bankers stressed the importance of compensating the loss of foreign cash reserves. The international loans and aids which will be given to Egypt will enhance the dollar liquidity position which had dampened Egypt’s foreign reserves to reach US$ 15.042 billion at the end of last September, compared to US$ 36 billion at the end of 2010, bankers noted.
Egypt will receive US$ 500 million as the first tranche of the EGP US$ one billion Turkish loan by the end of October. The second tranche of the loan will be disbursed by the end of January. The loan will be repaid on five years with a grace period of three years and an interest rate of 1%.
Osama El Manialawy, assistant general manager of the treasury department at Société Arabe Internationale de Banque (SAIB), said the international loans and aids represent temporary solution to financing the budget deficit, but not a long-term solution such as foreign investments. El Manialawy affirmed that dollar resources shall be increased so as to compensate the lost foreign reserves. Suez Canal development projects are important for increasing the Canal’s revenues through offering the required services for the passing ships.
Haitham Abdel Fattah, head of treasury department at the Industrial Development and Workers Bank of Egypt, said the foreign cash reserves are expected to reach US$ 21 billion by the middle of 2013, buoyed by the loans and deposits which will be injected to the country in the upcoming period such as the prospected US$ 4.8 billion loan from the International Monetary Fund (IMF). It is difficult to expect the value of foreign cash reserves in the future amid the current uncertainty in the country, he added. He then confirmed that increasing foreign cash reserves is a must after they lost about EGP 20.9 billion in the last year and nine months.
