The Central Bank of Egypt (CBE) said Tuesday it would raise its cap on foreign currency deposits to $250,000 a month for imports of food, capital machinery, manufacturing components, and medicines.
Last February, the CBE imposed capital controls and limited dollar-denominated deposits to $50,000 a month to crack down on the black market exchange. However, the move meant many importers could no longer get enough foreign currency to pay for foreign goods, which piled up at ports. The CBE said in a statement that the $50,000 a month cap would remain in place for ordinary deposits not used for imports of the list of “essential goods.” [Reuters, 1/26/2016]
Saudi Arabia outlined ambitious plans on Monday to move into industries including information technology, healthcare, and tourism, as the country seeks to convince international investors it can cope in an era of cheap oil. During a conference in Riyadh, top Saudi officials said they would reduce the kingdom’s dependence on oil and public sector employment. Growth and job creation would shift to the private sector, with state spending helping to jumpstart industries in the initial stage. “It’s going to switch from simple quantitative growth based on commodity exports to qualitative growth that is evenly distributed” across the economy, said Aramco Chairman Khalid al-Falih. Under the reforms, parts of the national health care system would be converted into independent commercial companies, officials said. Some participants in the conference expressed doubt about the scale of the planned change. However, they noted that strong political momentum has built up behind the reform plans. [Reuters, 1/25/2016]
The European Parliament’s (EP) Trade Committee on Monday backed a two-year emergency measure to import 70,000 tonnes of olive oil from Tunisia duty free to help the country’s struggling economy. “At a time when Tunisia is facing very serious problems, our vote gives the right signal: that the EU stands alongside Tunisians and that we intend to exercise solidarity in a tangible way,” French EP Member Marielle de Sarnez said. To meet the concerns of the EU olive oil producers, the committee inserted an amendment that allows the measure to be reviewed and corrected midway, should it harm the EU economy. “I know that for colleagues from some countries, the question of olive oil is a sensitive one. I want to reassure them that the amendment we adopted provides that, if after a year we realize that there is indeed a problem, the Commission may then take steps to rectify the imbalance,” de Sarnez said. [European Parliament, 1/25/2016]
Turkey’s central bank will tell the government in a letter that a collective effort is needed to lower inflation, Central Bank Governor Erdem Başçı said Tuesday as he announced the bank’s quarterly inflation report. The bank increased its inflation forecast rate by from 6.5 to 7.5 percent for 2016. Deputy Prime Minister Mehmet Şimşek has said battling inflation will be this year’s main challenge. But a sharp rise in the minimum wage, hikes in electricity prices and taxes, and President Recep Tayyip Erdoğan’s preference for low rates to boost growth are all obstacles. Başçı also said he was happy with the relatively flat yield curve under the central bank’s current policy framework. Commercial loans were growing faster than consumer loans, he said, which would help price stability. [Reuters, 1/26/2016]
Also of interest
Saudi Aramco expects oil prices to rise by 2016 | AP
Kuwait’s KPC head sees low oil prices for longer | Reuters
US crude drops back below $30 as Iraq adds record output | Reuters
Egypt’s stock exchange wavers after oil falls again | Aswat Masriya
Central Bank of Egypt’s policies to reduce car imports in 2016 | DNE
Egypt, Russia to sign MoU to establish industrial zone in Suez Gulf area | Ahram Online
Tunisia launches Italian-funded project to project to reduce youth unemployment, poverty | TAP
Deputy PM stresses reforms as a driver of more resources for Turkey | Daily Sabah
Deputy PM stresses reforms as a driver of more resources for Turkey | Daily Sabah
Rouhani says boosting Middle East economy is way to beat extremism | Reuters
World Bank says Turkey can surpass ‘middle-income trap’ | Anadolu Agency
World Bank says Turkey can surpass ‘middle-income trap’ | Anadolu Agency
Egypt raises cap on forex deposits for imports of essential goods
The Central Bank of Egypt (CBE) said Tuesday it would raise its cap on foreign currency deposits to $250,000 a month for imports of food, capital machinery, manufacturing components, and medicines. Last February, the CBE imposed capital controls and limited dollar-denominated deposits to $50,000 a month to crack down on the black market exchange. However, the move meant many importers could no longer get enough foreign currency to pay for foreign goods, which piled up at ports. The CBE said in a statement that the $50,000 a month cap would remain in place for ordinary deposits not used for imports of the list of “essential goods.” [Reuters, 1/26/2016]
Saudi Arabia presents plan to move beyond oil
Saudi Arabia outlined ambitious plans on Monday to move into industries including information technology, healthcare, and tourism, as the country seeks to convince international investors it can cope in an era of cheap oil. During a conference in Riyadh, top Saudi officials said they would reduce the kingdom’s dependence on oil and public sector employment. Growth and job creation would shift to the private sector, with state spending helping to jumpstart industries in the initial stage. “It’s going to switch from simple quantitative growth based on commodity exports to qualitative growth that is evenly distributed” across the economy, said Aramco Chairman Khalid al-Falih. Under the reforms, parts of the national health care system would be converted into independent commercial companies, officials said. Some participants in the conference expressed doubt about the scale of the planned change. However, they noted that strong political momentum has built up behind the reform plans. [Reuters, 1/2/5/2016]
European Parliament supports emergency plan to import Tunisian olive oil
The European Parliament’s (EP) Trade Committee on Monday backed a two-year emergency measure to import 70,000 tonnes of olive oil from Tunisia duty free to help the country’s struggling economy. “At a time when Tunisia is facing very serious problems, our vote gives the right signal: that the EU stands alongside Tunisians and that we intend to exercise solidarity in a tangible way,” French EP Member Marielle de Sarnez said. To meet the concerns of the EU olive oil producers, the committee inserted an amendment that allows the measure to be reviewed and corrected midway, should it harm the EU economy. “I know that for colleagues from some countries, the question of olive oil is a sensitive one. I want to reassure them that the amendment we adopted provides that, if after a year we realize that there is indeed a problem, the Commission may then take steps to rectify the imbalance,” de Sarnez said. [European Parliament, 1/25/2016]
Turkish central bank to tell government that collective effort needed against inflation
Turkey’s central bank will tell the government in a letter that a collective effort is needed to lower inflation, Central Bank Governor Erdem Başçı said Tuesday as he announced the bank’s quarterly inflation report. The bank increased its inflation forecast rate by from 6.5 to 7.5 percent for 2016. Deputy Prime Minister Mehmet Şimşek has said battling inflation will be this year’s main challenge. But a sharp rise in the minimum wage, hikes in electricity prices and taxes, and President Recep Tayyip Erdoğan’s preference for low rates to boost growth are all obstacles. Başçı also said he was happy with the relatively flat yield curve under the central bank’s current policy framework. Commercial loans were growing faster than consumer loans, he said, which would help price stability. [Reuters, 1/26/2016]
Also of interest
Saudi Aramco expects oil prices to rise by 2016 | AP
Kuwait’s KPC head sees low oil prices for longer | Reuters
US crude drops back below $30 as Iraq adds record output | Reuters
Egypt’s stock exchange wavers after oil falls again | Aswat Masriya
Central Bank of Egypt’s policies to reduce car imports in 2016 | DNE
Egypt, Russia to sign MoU to establish industrial zone in Suez Gulf area | Ahram Online
Tunisia launches Italian-funded project to project to reduce youth unemployment, poverty | TAP
Deputy PM stresses reforms as a driver of more resources for Turkey | Daily Sabah
World Bank says Turkey can surpass ‘middle-income trap’ | Anadolu Agency
Rouhani says boosting Middle East economy is way to beat extremism | Reuters