The World Bank is seeking to grant Tunisia $750 million to $1 billion a year as part of a program to mobilize $20 billion over five years for countries in Middle East and North Africa, according to World Bank Vice President for MENA Hafez Ghanem.
He said that the World Bank aims to grant Tunisia $4 billion over the next five years for priorities including institutional reform, improvements in the business climate, education reforms, and rural development. His remarks came on the sidelines of a conference in Tunis on regional and sustainable development organized by Japanese International Cooperation Agency. Ghanem also announced that UN Secretary General Ban Ki-moon will visit Tunis on 28, 2016 to show support of the international community for Tunisia. [TAP, 3/16/2016]
The Central Bank of Egypt (CBE) is expected to keep the pound stable at a regular foreign currency auction today, a day after it strengthened in an exceptional foreign currency auction. In a sale to cover temporary overdrafts of foreign currency at banks on Wednesday, the CBE sold $1.514 billion to banks at a rate of 8.78 pounds, up from the devalued rate of 8.85 that was announced on Monday. Sources said the banks that received dollars at the sale were requested to deposit the same amount back into the CBE for one year at an interest rate of 1.2312 percent. Head of Equities at Cairo-based Beltone Financial Hany Genena said Wednesday’s appreciation was part of the CBE’s strategy to clamp down on the black market. “This is flexibility in action, the kind of volatility the central bank wants to ingrain in the market,” Genena said. “The bank is trying to break the old return pattern that traders profited from, in which the pound was always weakening.” [Reuters, 3/17/2016]
Algeria has decided to reduce its imports by 15 percent in 2016 to preserve foreign currency reserves, Prime Minister Abdelmalek Sellal said in a letter to the central bank and state banks. Importers have been waiting for months for a complete government list of licenses on a range of goods. “They are slowly, steadily putting down obstacles on imports as a way to cut demand,” said one importer. The central bank also recently added a further restriction on imports, requiring importers to get a pre-clearance of import operations through online registration with state banks. Customs Director Kaddour Bentahar said the measure would help reduce illicit cash transfers and false transactions that have exaggerated the flow of foreign currency. However, the International Monetary Fund said this week that “import restrictions, while perhaps providing a temporary relief, introduce distortions and cannot substitute for reforms aimed at boosting export.” [Reuters, 3/16/2016]
The Ministry of Economy in Libya’s Tripoli government says it will ban the import various nonessential commodities for the next three months. The list of banned imports includes cars and heavy machinery, gold, dates, olive oil, certain house appliances, and other products. The ministry said the restrictions are part of the Central Bank of Libya’s (CBL) plans. It said the CBL had allocated a specific budget to open letters of credit to finance the import of essential commodities, mostly food and medical items, over the next three months. The import restrictions come as Libya faces a severe shortage of foreign currency. [Libya Monitor (subscription), 3/16/2016]
Turkey’s central bank may cut its overnight lending rate, according to President Recep Tayyip Erdogan’s chief economic adviser Cemil Ertem. In an interview Thursday, Ertem said the cost of borrowing in Turkey remains excessively high and the overnight lending rate is a major indicator watched by commercial lenders. Erdogan has repeatedly called on the central bank to lower interest rates to reduce inflation. “We think that Turkey’s existing economic model has come to a successful ending, and that there’s a need for a transition to a new model,” Ertem said. “The ongoing debate about interest rates is essentially a debate about a new growth model.” [Bloomberg, 3/17/2016]
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