Egypt is preparing to start loan talks with the International Monetary Fund (IMF), an anonymous senior government official said Wednesday. The size of the loan Egypt has not yet been determined yet.
Egypt has held several rounds of negotiations with the IMF since 2011, reaching two staff-level agreements that were never finalized. Head of Equities Strategy at Beltone Financial Hany Genena said that a deal may be easier this time. “Egypt has already implemented a big chunk of the economic measures that the IMF typically asks for,” he said, referring to cuts in fuel subsidies and higher electricity prices. Governor of the Central Bank of Egypt Tarek Amer denied plan to start loan talks with the IMF and said that Egypt’s dollar shortage is temporary. “Previous experiences prove that rumors and exaggerations don’t have economic foundations,” he said. Nevertheless, the IMF “stands ready to help” Egypt. [Bloomberg, 3/9/2016]
Banks in the United Arab Emirates (UAE) have agreed to a plan to help small and medium-sized businesses (SMEs) struggling with debt, including suspending payments and restructuring loans. Under the proposal outlined by the UAE Banks Federation, companies owing debt to more than one bank that are having difficulty making payments will be able to restructure future payments. Payments could also be suspended while businesses reach a deal on their debt with lenders. “This again reflects banks’ commitment to apply a coordinated approach, to alleviate SME funding difficulties and continue support to the SME sector being vital to the national economy,” said Federation Chairman Abdul Aziz al-Ghurair said. Some struggling business people have opted to leave the country. A senior banking official in November estimated the amount owed by departed business people reached around $1.4 billion last year. [Reuters, 3/9/2016]
Fitch Ratings agency has upgraded its 2016 growth forecast for Turkey to 3.5 percent from 3 percent, due to a better than expected economic performance. Fitch Chief Economist Brian Coulton said that incoming data for 2015 indicates more near-term economic momentum. “With the support of the increase in the minimum wage and low oil prices, consumer spending has been increasing,” Coulton said. Fitch is forecasting 3.6 percent growth in 2017. Meanwhile, data on Thursday showed that Turkey’s current account deficit narrowed more than expected in January as lower oil prices helped offset a decline in tourist and small-trade revenue from Russia. Analysts expect political tension with Moscow to contribute an additional $5 billion toward the current account deficit this year. [Anadolu Agency, Daily Sabah, 3/10/2016]
Iraq’s central bank said it plans to sell 1.5 trillion Iraqi dinars ($1.27 billion) in two-year government bonds, as part of an effort to reduce a deficit caused by falling oil prices and the cost of fighting the Islamic State (ISIS or ISIL). It is the first such sale to the public since 2003 and the first tranche of a 5 trillion dinar bond plan announced in January, Central Bank Media Relations Officer Acer Jabbar said. The new issue, which carries a 6 percent interest rate, will be sold to the public and local lenders between March 15 and April 15, the bank said in a statement. [Reuters, 3/10/2016]
Also of interest
Saudi Aramco said to seek advice on assets and timing for IPO | Bloomberg
OPEC cuts unlikely before US, Russia, Iraq reduce output | Reuters
Egypt to cut price of gas to steel and iron factories | Reuters
Egyptian importers seek loopholes amid dollar shortage | Reuters
EGP decline threatens Egypt’s economic growth | DNE
Egypt’s core inflation eases to 7.5 percent yr/yr in February | Reuters
Egypt’s annual urban consumer price inflation eases to 9.1 percent in February | Reuters
Suez Cement working to limit impact of Egypt’s dollar shortage | Bloomberg
Algeria in talks with China over iron mining project | Reuters
Iraq prepares to amend its existing oil contracts | Al Monitor
Turkish parliament approves 2016 administration budget | Anadolu Agency
Egypt may start talks with IMF amid dollar shortage; Amer denies
Egypt is preparing to start loan talks with the International Monetary Fund (IMF), an anonymous senior government official said Wednesday. The size of the loan Egypt has not yet been determined yet. Egypt has held several rounds of negotiations with the IMF since 2011, reaching two staff-level agreements that were never finalized. Head of Equities Strategy at Beltone Financial Hany Genena said that a deal may be easier this time. “Egypt has already implemented a big chunk of the economic measures that the IMF typically asks for,” he said, referring to cuts in fuel subsidies and higher electricity prices. Governor of the Central Bank of Egypt Tarek Amer denied plans to start loan talks with the IMF and said that Egypt’s dollar shortage is temporary. “Previous experiences prove that rumors and exaggerations don’t have economic foundations,” he said. Nevertheless, the IMF “stands ready to help” Egypt. [Bloomberg, 3/9/2016]
UAE banks devise plan to help struggling SMEs
Banks in the United Arab Emirates (UAE) have agreed to a plan to help small and medium-sized businesses (SMEs) struggling with debt, including suspending payments and restructuring loans. Under the proposal outlined by the UAE Banks Federation, companies owing debt to more than one bank that are having difficulty making payments will be able to restructure future payments. Payments could also be suspended while businesses reach a deal on their debt with lenders. “This again reflects banks’ commitment to apply a coordinated approach, to alleviate SME funding difficulties and continue support to the SME sector being vital to the national economy,” said Federation Chairman Abdul Aziz al-Ghurair said. Some struggling business people have opted to leave the country. A senior banking official in November estimated the amount owed by departed business people reached around $1.4 billion last year. [Reuters, 3/9/2016]
Fitch raises Turkey’s growth forecast for 2016
Fitch Ratings agency has upgraded its 2016 growth forecast for Turkey to 3.5 percent from 3 percent, due to a better than expected economic performance. Fitch Chief Economist Brian Coulton said that incoming data for 2015 indicates more near-term economic momentum. “With the support of the increase in the minimum wage and low oil prices, consumer spending has been increasing,” Coulton said. Fitch is forecasting 3.6 percent growth in 2017. Meanwhile, data on Thursday showed that Turkey’s current account deficit narrowed more than expected in January as lower oil prices helped offset a decline in tourist and small-trade revenue from Russia. Analysts expect political tension with Moscow to contribute an additional $5 billion toward the current account deficit this year. [Anadolu Agency, Daily Sabah, 3/10/2016]
Iraq sells first local bonds to public since 2003
Iraq’s central bank said it plans to sell 1.5 trillion Iraqi dinars ($1.27 billion) in two-year government bonds, as part of an effort to reduce a deficit caused by falling oil prices and the cost of fighting the Islamic State (ISIS or ISIL). It is the first such sale to the public since 2003 and the first tranche of a 5 trillion dinar bond plan announced in January, Central Bank Media Relations Officer Acer Jabbar said. The new issue, which carries a 6 percent interest rate, will be sold to the public and local lenders between March 15 and April 15, the bank said in a statement. [Reuters, 3/10/2016]
Also of interest
Saudi Aramco said to seek advice on assets and timing for IPO | Bloomberg
OPEC cuts unlikely before US, Russia, Iraq reduce output | Reuters
Egypt to cut price of gas to steel and iron factories | Reuters
Egyptian importers seek loopholes amid dollar shortage | Reuters
EGP decline threatens Egypt’s economic growth | DNE
Egypt’s core inflation eases to 7.5 percent yr/yr in February | Reuters
Egypt’s annual urban consumer price inflation eases to 9.1 percent in February | Reuters
Suez Cement working to limit impact of Egypt’s dollar shortage | Bloomberg
Algeria in talks with China over iron mining project | Reuters
Iraq prepares to amend its existing oil contracts | Al Monitor
Turkish parliament approves 2016 administration budget | Anadolu Agency