Central Bank of Egypt

Transcription

1 Central Bank of Egypt External Position of the Egyptian Economy During FY 2008/09 Quarterly Report Volume No. (26)

2 Central Bank of Egypt External Position Preface The External Position of the Egyptian Economy Report is one of a series released by the Central Bank of Egypt (CBE) on a quarterly basis. It aims to make available to a broad readership of specialists and non-specialists a reasonable range of information on the performance of the country's external sector during the reporting period. The series reviews the key developments in the main components of Egypt's Balance of Payments (BOP). It also sheds light on the country's International Investment Position (IIP), external debt, external liquidity and recent exchange rate developments. The report at hand, the twenty sixth in this series, covers the FY 2008/09. The Central Bank of Egypt posts this series along with its other publications on its website Hard copies can be obtained from the Research, Development and Publishing Sector, 8 th floor, 54 El Gomhouria street, Cairo.

3 Central Bank of Egypt External Position Table of Contents Section I: Overview Balance of Payments Page Section II: BOP Performance. 1 1-Current Account 1 2-Capital and Financial Account 4 External Liquidity A -Net International Reserves (NIR) 5 B -Net Foreign Assets of Banks (NFA) 5 Section III: External Debt A -Breakdown by Type 7 B- Breakdown by Currency 8 C - Breakdown by Creditor 8 D - Breakdown by Debtor 8 E -External Debt Indicators 9 Section IV : Exchange Rate Developments 11 Statistical Section: Appendix I 1-Balance of Payments International Investment Position (IIP) 17 3-NIR & NFA of Banking System 18 4-External Debt by Type 19 5-External Debt Indicators 20 6-External Debt by Debtor 21 7-Exchange Rates 22 Appendix II I- External Debt: Outstanding Stock II- Medium-and Long-Term External Debt Service III- Exchange Rates of the Currencies of External Debt versus US Dollar

4 Central Bank of Egypt External Position E gypt's BOP switched to an overall deficit of about US$ 3.4 billion, throughout the FY 2008/09 that witnessed the global financial crisis, from an overall surplus of US$ 5.4 billion a year earlier. As such, gross international reserves fell by an equal amount. Such deficit was an outcome of a current account deficit of US$ 4.4 billion and weak net inflows of US$ 1.4 billion in the capital and financial account. The current account deficit was induced by a wider trade deficit, coincided with a declining surplus in both the services balance and net unrequited transfers. The capital and financial account net inflows were due to an inflow of US$ 8.1 billion in net Foreign Direct Investment in Egypt (FDI); US$ 3.9 billion in net foreign assets and liabilities; and a net outflow of US$ 9.2 billion in portfolio investment in Egypt. International Investment Position (IIP) recorded net liabilities of US$ 8.3 billion at end of Dec. 2007*, down from US$ 10.8 billion in Dec and from US$ 16.0 billion in Dec The declining trend of net liabilities attests to the success of the reform process in Egypt, and the better business climate. In April 2009, Egypt was chosen (for the third time) top reformer of all MENA countries by the International Finance Corporation (IFC) - World Bank. Net international reserves (NIR) decreased by US$ 3.3 billion during FY 2008/09, to reach US$ 31.3 billion at end of June 2009, covering 7.5 months of merchandise imports. During the report printing period, NIR increased to US$ 33.5 billion at end of September The rise is principally ascribed to the IMF Overview general allocation of special drawing rights (SDRs) to member countries. As a result, Egypt's share of SDRs increased in the equivalent of US$ 1.2 billion. Banks' net foreign assets amounted to US$ 14.7 billion at end of June 2009, down by US$ 8.4 billion from June 2008 level. Foreign currency deposits with banks decreased by 0.3 percent, to post US$ 29.9 billion at end of June As a percentage of total deposits, they decreased from 24.1 percent in June 2008 to 23.4 percent at end of June Egypt's outstanding external debt (public, private and all maturities) denominated in US dollar, dropped by US$ 2.4 billion to US$ 31.5 billion at end of June 2009, from US$ 33.9 billion at end of June The decrease was an outcome of two factors. First, the depreciation of most currencies versus the US dollar, decreasing the external debt by some US$ 1.3 billion. Second, the net repayment of US$ 1.1 billion. The external debt position continued to have a favorable profile, with 93.2 percent representing medium- and long- term debt. The public sector is the major obligor, carrying 94.2 percent of total external debt. External debt/ GDP ratio dropped to 17.0 percent at end of June 2009, from 20.1 percent a year earlier. The weighted average rate of the interbank foreign exchange market reached pt per US dollar at end of June 2009, compared with pt at end of June Accordingly, the Egyptian pound exchange rate depreciated by around 4.7 percent during FY 2008/09. * Latest IIP data released (vol. 24 of external position) according to SDDS requirements.

5 Section I Balance of Payments

6 Central Bank of Egypt External Position 1 BOP Performance During FY 2008/ As the global economic crisis runs its course throughout the FY 2008/09, Egypt's balance of payments was negatively affected, reflecting an overall deficit of about US$ 3.4 billion, against a surplus of US$ 5.4 billion a year earlier. The overall deficit was an outcome of a current account deficit, and weak net inflows in the capital and financial account. US$ bn BOP Overall Balance FY / / July/Sept. Oct./Dec. Jan./March April/June The above figure shows the impact of the financial crisis on the overall balance on quarterly basis. US$ bn Current Account FY July/Sept. Oct./Dec. Jan./March April/June 1.1: Trade Balance 2007/ /09 The trade deficit, due to the global recession, widened by US$ 1.8 billion or 7.5 percent during FY 2008/09, as exports and imports decreased by 14.3 percent and 4.6 percent, respectively. Merchandise exports (FOB) dropped by US$ 4.2 billion reaching 25.2 US$ billion (13.4 percent of GDP) in FY 2008/09. Oil exports decreased by 24.0 percent on the back of the decline in oil prices, while non-oil exports dropped by 4.8 percent. 1 - Current Account The current account switched from a surplus of US$ 0.9 billion during FY 2007/08 to a deficit of US$ 4.4 billion during FY 2008/09. Such deficit was driven by a wider trade deficit of US$ 25.2 billion (13.4 percent of GDP) eroding the surplus in both the services balance (US$ 12.5 billion, or 6.7 percent of GDP) and net unrequited transfers (US$ 8.2 billion, or 4.4 percent of GDP). Raw materials %6.5 Non- Oil 56.3% Semi Finished Goods %13.5 Exports US$ 25.2 bn Finished Goods %74.5 Natural Gas %28.1 Oil 43.7% Crude Oil %36.4 Oil Products %35.5

7 Central Bank of Egypt External Position 2 Merchandise imports (CIF) decreased by US$ 2.4 billion, to reach US$ 50.3 billion (26.8 percent of GDP), as an outcome of a 26.4 percent decrease in oil imports, to post US$ 7.0 billion, and a 0.2 percent increase in non-oil imports, to reach US$ 43.3 billion. Export-import ratio dropped to 50.0 percent during the FY 2008/2009 from 55.6 percent a year earlier. Intermediate goods US$ 16.6 bn Investment Goods US$ 10.3 bn Fuel & Mineral Oils US$ 4.9 bn. Total Imports US$ 50.3 bn Raw Materials US$ 6.5 bn Undistributed Imports US$ 2.4 bn Consumer Goods US$ 9.6 bn On a quarterly basis, the trade deficit improved during the fourth quarter of FY 2008/09, to register US$ 5.7 billion from US$ 6.6 billion a year earlier, as exports and imports decreased by 30.6 and 23.4 percent respectively. 1.2: Services Balance and transfers During the FY 2008/09 the services balance surplus shrank to US$ 12.5 billion (49.7 percent of trade deficit) against US$ 15.0 billion a year earlier. Such decline stemmed from the decrease in services receipts by US$ 3.4 billion or 12.5 percent, surpassing the US$ 0.9 billion or 7.7 percent drop in service payments. The decline was witnessed during the third and fourth quarters of the reporting fiscal year, as shown in the following figure: Services receipts decline to US$ 23.8 billion is driven by the fall in the following items: Investment income by 41.1 percent, to reach US$ 1.9 billion, under weak investment income of debt instruments in world markets, as a result of the global financial crisis; Tourism revenues by 3.1 percent to US$ 10.5 billion, affected by the adverse global economic conditions. The decline of tourism revenues was clear during the second and third quarters of the FY, while it maintained the same level during the fourth quarter, compared to the corresponding period of the previous fiscal year. Transportation receipts declined slightly by 1.0 percent to US$ 7.5 billion, driven by the 8.4 percent drop in Suez Canal receipts, mainly during the third and fourth quarters of the current FY, to US$ 4.7 billion against US$ 5.2 billion a year earlier. US$ bn US$ bn Developments of Main Items of Service Receipts Service Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q / /09 Serv ices Receipts Serv ices Balance 4.9 Serv ices Pay ments Travel Suez Canal 2007/ /09

8 Central Bank of Egypt External Position 3 Other services receipts decreased by 31.9 percent, due to the fall in receipts from constructions services, communications services, legal consultation fees and insurance services. Services payments declined to US$ 11.3 billion as a result of the decline in all components. Specifically other services payments drew back by 8.4 percent, recording US$ 4.1 billion, due to a drop in amounts transferred abroad by Egyptian companies, payments for communications services, construction services payments, and legal consultation fees. Investment income decreased by 8.0 percent, due to lower profits transferred abroad by foreign petroleum companies, and the decline of interest payments on external debts, and non-residents deposits. Transportation Payments declined by 7.9 percent to US$ 1.5 billion due to lower transfers for repairs of aircrafts at foreign airports, and from Egyptian navigation & foreign airline companies. Travel payments decreased by 5.4 percent due to the decline in expenses of tourism and medical care, expenditures of training, technical and educational missions abroad, and expenses of students abroad. Government expenditures declined by 10.0 percent. Net unrequited transfers decreased by 11.7 percent, to record US$ 8.2 billion, or 4.4 percent of GDP, against US$ 9.3 billion or 5.7 percent of GDP a year earlier. The decline was attributed to the drop in both net private & official transfers, particularly in the third and fourth quarters of the FY 2008/09 as compared with the correspondding quarters a year earlier. Net Private transfers declined by 8.9 percent, mainly due to the decrease in workers' remittances by 8.8 percent. Net official transfers drew back, under lower cash grants and donations to the Egyptian government US$ bn Workers' Remittances Q1 Q2 Q3 Q4 Given the aforementioned developments in the current account, most external balancing indicators have been affected as shown in the following figure: / / % Services Receipts & Payments Items as a Percentage of Total Service Receipts & Payments FY 2008/ % External Balancing Indicators (FY) / / Merchandise Exports/ Service Receipts/ Service Current Receipts/ Current Current Receipts Merchandise Imports Payments Pay ments (excluding official Services Receipt s Services Payment s transfers)/current Pay ments

9 Central Bank of Egypt External Position 4 2- Capital and Financial Account The capital and financial account s net inflow lowered to US$ 1.4 billion during FY 2008/09, from US$ 7.6 billion a year earlier, due to the following factors: A- Foreign direct investments (FDI) in Egypt fell by 38.7 percent to US$ 8.1 billion, (4.3 percent of GDP), against US$ 13.2 billion, (8.1 percent of GDP) a year earlier. Such decline was noticed mainly during the second and third quarters of the FY 2008/09 on the back of the financial crisis, yet it revived during the fourth quarter, compared with the corresponding quarter a year earlier. The decline was attributed to lower greenfield investments (from US$ 6.4 billion to US$ 2.3 billion) and also weak privatization proceeds (from US$ 2.3 billion to only US$ 0.3 billion). In contrast, net direct investments in the petroleum sector increased, reaching US$ 5.4 billion, against US$ 4.1 billion. Breakdown of total FDI inflows by economic sectors, excluding the petroleum, shows that manufacturing sector absorbed 6.6 percent, telecommunications 5.7 percent, financial sector 3.4 percent, services 2.2 percent, construction 1.8 percent, real estate sector 1.1 percent, & tourism sector 0.9 percent US$ bn Net Foreign Investments Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net FDI in Egy pt B- Portfolio investment in Egypt recorded a net outflow of US$ 9.2 billion during FY 2008/09 (against US$ 1.4 billion), of which net sales of Egyptian treasury bills posted US$ 7.1 billion. This reflects a substantial foreigners divestment during the first and second quarters of the FY 2008/09. Yet, the outflows started to shrink during the third and fourth quarters as foreigners positions were nearly all liquidated. Foreigners' net sales in the Egyptian stock market amounted to US$ 1.1 billion. Net transactions on sovereign bonds and LE bonds issued abroad unfolded an outflow of US$ 1.0 billion. C-Net foreign assets and liabilities registered an inflow of US$ 3.9 billion, compared with an outflow of US$ 3.4 billion a year earlier. D- Medium - & long-term loans and suppliers' credit realized net repayments of US$ 1.2 billion (against US$ million) resulting from higher repayments of US$ 2.3 billion (compared with US$ 1.8 billion), and modest rise in drawings amounting to US$ 1.1 billion (compared with US$ 1.0 billion) / / Net Portfolio Inv es tment in Egy pt

10 Section II External Liquidity

11 Central Bank of Egypt External Position 5 External Liquidity Developments A-Net International Reserves (NIR) D uring FY 2008/09, NIR decreased by US$ 3.3 billion, against an increase of US$ 6.0 billion, to reach US$ 31.3 billion at the end of June NIR, expressed in months of merchandise imports, reached 7.5 months. NIR & Months of Imports Covered US$ bn (End of June) (Month) Gold Other Foreign Exchange Reserves/Months Imports While this report was under preparation, NIR reached US$ 33.5 billion at end of September The pickup was mainly ascribed to the augmentation of Egypt's SDR holdings by US$ 1.2 billion worth, under the IMF general allocation of SDRs to participants in IMF SDR department. The SDRs allocation to IMF members was made in proportion to their respective quotas under a plan to boost global liquidity in international markets to face the global financial crisis. Eventually, members total allocation of SDRs rose to the equivalent of US$ 283 billion. Concerning CBE international reserves policy management, the Bank's investment policy aimed at diversifying the composition of NIR to include other currencies besides the US dollar. The policy was based upon certain factors: Egypt's external debt structure; currencies of Egypt's main trade partners; and reserves' distribution among many portfolios, with maturities and goals being risk/return balanced. (US$ mn) End of June 2008 June 2009 Net International Reserves (1-2) Gross Official Reserves Gold Foreign Exchange SDRs Other Reserve Liabilities Reserves/Months of Imports Currently, the CBE deals with its reserves on real time basis via the most advanced electronic systems worldwide. B- Net Foreign Assets of Banks (NFA) Banks net foreign assets decreased by US$ 8.4 billion during FY 2008/09, to reach US$ 14.7 billion at end of June Foreign Assets & Liabilities of Banks (End of June) US$ bn Assets Liabilities

12 Central Bank of Egypt External Position 6 During FY 2008/09, foreign currency deposits with banks decreased by 0.3 percent, against an increase of 10.9 percent in the corresponding period, to reach US$ 29.9 billion at end of June LE bn Developments in Deposits by Local and Foreign Currencies (End of June) Foreign Currency Deposits On the other hand, local currency deposits increased by 8.7 percent, compared with 19.0 percent. Accordingly, the ratio of foreign currency deposits to total deposits decreased to 23.4 percent at end of June 2009, from 24.1% at end of June Local Currency Deposits

13 Section III External Debt

14 Central Bank of Egypt External Position 7 E gypt's external debt (public and private- all maturities) registered US$ 31.5 billion at end of June 2009, against US$ 33.9 billion at end of June 2008, down by US$ 2.4 billion. The decrease resulted from two main factors: First, a depreciation in the majority of currencies vis-à-vis the US dollar by about US$ 1.3 billion. Second, net repayments of US$ 1.1 billion (due to principal repayments of US$ 3.5 billion and disbursements of US$ 2.4 billion). A- Breakdown by Type At the end of June 2009, external debt by maturity indicates that medium- and long-term external debt registered 93.2 percent of total debt and short-term external debt represented 6.8 percent. - Bilateral loans (rescheduled and non-rescheduled) and suppliers & buyers credit owed to Paris Club members accounted for US$ 18.4 billion or 58.2 percent of total debt. of which US$ 14.1 billion or 44.7 percent are rescheduled loans (third stage) to be settled on semi-annual payments by end of the second half of In addition, US$ 4.3 billion or 13.6 percent loans are due in 2050 as agreed upon after signing the rescheduling agreement (Post Cut-off Date). [See Table 1, Appendix II, page 25] Debt due to non-paris Club members amounted to US$ 0.8 billion. External Debt - International and regional organizations debt amounted to US$ 8.2 billion, or 25.9 percent of total debt at end of June 2009, increasing by US$ 0.8 billion from end of June Government bonds and notes stock, however, decreased by US$ 0.7 billion, to US$ 1.9 billion or 6.2 percent of total debt at end of June 2009, including: * US$ 0.2 billion as sovereign bonds, issued in June 2001, and falling due in July * US$ 1.3 billion as guaranteed notes, issued in Sept. 2005, and falling due in Sept * US$ 0.4 billion as Egyptian pound Eurobonds issued in July 2007, and falling due in July Short-term debt decreased by US$ 0.4 billion, reaching US$ 2.1 billion or 6.8 percent of the total. Egyptian bonds and notes 6.2% International & regional organizations 25.9% Suppliers' & Buyers' Credits Other 1.0% bilateral debt 15.3% External Debt by Type Private sector (Non guaranteed) 0.2% Short term debt 6.8% Rescheduled bilateral debt 44.6% External debt data reveal an ongoing improvement in its structure. The public sector owed US$ 29.7 billion or 94.2 percent of Egypt s external debt, while the private sector owed US$ 1.8 billion or 5.8 percent.

15 Central Bank of Egypt External Position 8 Medium- and long-term non-guaranteed debt of the private sector reached US$ 83.0 million or 0.2 percent of the total at end of June B- Breakdown by Currency A breakdown of external debt by main component currencies indicated that the US dollar is the main borrowing currency (creditors other than the USA), with a relative importance of 40.2 percent of the total. The euro comes next, constituting 32.4 percent, then the Japanese yen 12.5 percent and the Kuwaiti dinar 5.5 percent. External Debt by Major Currencies End ofjune 2009 Kuw aiti dinar 5.5% Japanese yen 12.5% Egyptian Pound 1.4% Sw iss franc 1.7% US dollar 40.2% Euro 32.4% SDRs 4.1% Other currencies 2.2% External Debt by Creditor Egyptian bonds and notes 6.2% International organizations 25.9% Other countries 11.8% Arab Countries 4.8% End of June 2009 United Kingdom 2.1% USA 11.5% France 13.4% Japan 12.0% Germany 12.3% D- Breakdown by Debtor* Debt of the main institutional sectors dropped by US$ 2.4 billion at end of June As such, debt of Other sectors decreased by US$ 5.7 billion, Banks by US$ 0.7 billion and the Monetary authority (CBE) by US$ 78.3 million. On the other hand, the debt of Central and local government increased by US$ 4.2 billion. (US$ mn) External Debt by domestic sectors share in total increase/decrease during FY C- Breakdown by Creditor Distribution by creditor indicates that 49.2 percent of Egypt's external debt is owed to four countries; namely, France (13.4 percent), Germany (12.3 percent), Japan (12.0 percent), and USA (11.5 percent). Meanwhile, 4.8 percent is owed to Arab countries (mainly Kuwait, United Arab Emirates and Saudi Arabia) (2000.0) (4000.0) (6000.0) (165.6) (348.6) (25.7) (78.3) (744.6) (5715.4) 2006/ / /2009 Central & Local Government Monetary Authority (CBE) Banks Other Sectors As of September 2008, government debt statistics increased, primarily due to the reclassification of on lending activities under the "Central and Local Government" debt instead of "Other Sectors" debt. Such reclassification has no impact on the total outstanding external debt. So far, there are no available figures for previous periods.

16 Central Bank of Egypt External Position 9 The structure of Egypt s external debt by debtor did not witness any significant change. The central and local government remained the main debtor, with US$ 25.8 billion or 81.9 percent of the total external debt at end of June 2009, compared with US$ 21.6 billion at end of June (US$ bn) External Debt by Debtor End of June Central & Local Government Monetary Authority (CBE) Banks Other Sectors Current receipts (exports of goods and services, including transfers) decreased by 13.2 percent. This led to an increase in the debt service ratio to exports of goods and services to 6.2 percent during FY 2008/09, from 4.6 percent a year earlier. Likewise, its ratio to current receipts (including transfers) went up to 5.3 percent from 3.9 percent. % External Debt Indicators FY / / / /09 Debt Service / Current Receipts Short-term Debt / Net International Reserves Short-term Debt / total external debt Debt Service / Exports (G & S) E- External Debt Indicators During FY 2008/2009, most of Egypt's external debt indicators improved*. The growth of GDP, combined with the drop of the external debt, brought down the ratio of external debt to GDP from 20.1 percent to 17.0 percent at end of June % External Debt Indicators FY / / / /09 (US$) The ratio of short-term debt to NIR decreased from 7.3 percent to 6.8 percent, owing to a decrease in shortterm debt by 15.7 percent. Similarly, its ratio to total debt decreased from 7.4 percent to 6.8 percent. External debt per capita declined from US$ to US$ during FY 2008/09. Medium- and long-term debt service payments increased by US$ million. This was a result of the US$ million increase in principal repayments, to US$ 2.3 billion and of the US$ 59.3 million decrease in interest payments, to US$ 0.7 billion). External Debt / Exports (G & S) External Debt /GDP (at current market prices) External Debt per capita (US$) (right axes) * For more indicators, refer to appendix I table No 4.

17 Central Bank of Egypt External Position 10 US$ mn Total Medium and long-term Public and Publicly Guaranteed External Debt Service Years PRINCIPAL INTEREST T O T A L total external debt which reached US$ 31.5 billion at the end of June 2009, reflecting a secure economy. US$ bn External Debt and Net International Reserves Net International Reserves (NIR) reached US $ 31.3 billion at the end of June 2009, covering 99.3% of the External Debt NIR It is observed that the ratio of debt service in Egypt is comparatively lower than that of developing countries combined, as illustrated in the following table: Debt Service/Exports of Goods and Services in Egypt Versus the Group of Developing Countries Calendar Years Interest Principal Total Interest Principal Total Developing countries Africa Asia (developing countries) Middle East Egypt * Source: IMF's World Economic Outlook April 2009 (statistical appendix) * According to BOP data during the two calendar years 2007 and (%)

18 Section IV Exchange Rate Developments

19 Central Bank of Egypt External Position 11 Exchange Rate Developments According to CBE Central Chamber for FX Statistics, the weighted average of US dollar exchange rate in the interbank foreign exchange market (launched in December 2004) reached EGP at the end of June 2009, against EGP at end of June 2008, appreciating by 4.9 percent Exchange rate Of The US$ against EG Pound End Of June As for market rates, during FY 2008/09, The Egyptian pound exchange rate depreciated by around 4.7 percent vis a vis the US$, mainly due to the global economic slowdown and the current account deficit. The exchange rates of some currencies against the Egyptian pound declined: the pound sterling by 12.6 percent, the euro by 6.0 percent, and the Kuwaiti Dinar by 3.3 percent. (In Piasters) InterBank Weighted Av erage Rate Market Rate

20 Statistical Section

21 Central Bank of Egypt External Position Appendix I Table Page I- Balance of Payments BOP Current Account 1 15 BOP Capital and Financial Account (contd.) 16 II- International Investment Position (IIP) 2 17 III- External Liquidity Net International Reserves & Net Foreign Assets of Banking System IV- External Debt External Debt by Type External Debt Indicators External Debt by Debtor V- Exchange Rate Developments Exchange Rates ( in piasters per foreign currency unit ) 7 22

22 Central Bank of Egypt - External Position 15 Table (1) Balance of Payments (US$ mn) FY 2007/ /09* Trade Balance Exports** Petroleum Other Exports Imports** Petroleum Other Imports Services (Net) Receipts Transportation, of which : Suez Canal Travel Investment Income Government receipts Other Payments Transportation Travel Investment Income, of which Interest Paid Government Expenditures Other Balance of Goods & Services Transfers Private Transfers (Net) Official Transfers (Net) Current Account Balance * Preliminary. ** Include free zones exports and imports.

23 Central Bank of Egypt - External Position 16 Table (1) Balance of Payments (contd.) (US$ mn) FY 2007/ /09* Capital & Financial Account Capital Account Financial Account Direct Investment Abroad Direct Investment in Egypt (Net) Portfolio Investment Abroad (Net) Portfolio Investment in Egypt (Net), of which: Bonds Other Investment (Net) Net Borrowing M&L-Term Loans (Net) Drawings Repayments MT-Suppliers' Credit (Net) Drawings Repayments ST-Suppliers' Credit (Net) Other Assets Central Bank Banks Other Other Liabilities Central Bank Banks Net Errors & Omissions Overall Balance Change in CBE Reserve Assets,Increase(-) * Preliminary.

24 Central Bank of Egypt - External Position 17 Table (2) International Investment Position (IIP) End of December 2005 December 2006 December 2007 * Assets Liabilities Assets Liabilities Assets Liabilities Total Direct investment Portfolio investments Equity security Debt security Other investments Trade credits General government Other sectors Short-term Loans Monetary authorities Use of Fund credit & loans from the Fund Other long-term General government Long-term Banks Long-term Short-term Other sectors Long-term Currency and deposits Monetary authorities Banks Other sectors Other assets Monetary authorities Short-term General government Banks Long-term Short-term Other sectors Reserves assets * Preliminary.

25 Table (3) :Net International Reserves &Net Foreign Assets of Banking System US$ million End of June Net International Reserves (1-2) Gross Official Reserves Gold Foreign exchange SDRs Central Bank of Egypt - External Position Other Reserve Liabilities Banks' Net Foreign Assets Assets Liabilities

26 Table (4) External Debt (US$ mn) End of June Total External Debt* Medium- & Long-term debt : Rescheduled bilateral debt ** ODA Non-ODA Other bilateral debt Paris Club countries Central Bank of Egypt - External Position Other countries International & regional organizations Suppliers' & buyers' credits Egyptian bonds and notes Long- term deposits # Private sector debt (non-guaranteed) Short-term debt Deposits Other short-term facilities Source: Central Bank of Egypt. + Provisional * The difference from World Bank data is in short-term debt. ** According to the agreement signed with Paris Club countries on May 25, # It has been agreed to consider the Arab International Bank deposits a medium- and long- term external debt. 19

27 Table (5) External Debt Indicators (%) F Y 2002/ / / / / / /09 External Debt / Exports (G & S) % Debt Service * (Principal & Interest) (US$ mn) Debt Service / Exports (G & S) % Debt Service / Current Receipts % Interest / Exports (G & S) % External Debt /GDP (at current market prices) Short-term Debt / External Debt Short-term Debt / Net International Reserves External Debt per capita (US$) * Includes interest payments on US dollar-denominated bonds and notes held by non-residents. Central Bank of Egypt - External Position 20

28 Central Bank of Egypt - External Position 21 Table (6) External Debt by Debtor (US$ mn) * End of June 2008 % 2009 % Change (-) % External Debt (2361.7) (7.0) Total Medium- & Long-Term (1966.4) (6.3) Total Short-Term (395.3) (15.7) Central & Local Government Medium- & Long-Term Bonds & Notes (725.7) (27.4) Loans Currency and Deposits Other Liabilities Short-Term Monetary Authority (78.3) (27.0) Medium- & Long-Term (78.3) (27.0) Bonds & Notes Loans (78.3) (27.0) Currency and Deposits Other Liabilities Short-Term Money Market Instruments Loans Currency and Deposits Other Liabilities Banks (744.6) (29.3) Medium- & Long-Term Loans (740.6) (54.4) Bonds & Notes Loans (740.6) (54.4) Currency and Deposits Other Liabilities Short-Term Loans (4.0) (0.3) Money Market Instruments Loans (16.5) (45.2) Currency and Deposits Other Liabilities (95.3) (100.0) Other Sectors (5,715.4) (60.7) Medium- & Long-Term (5,324.1) (65.9) Loans from Direct Investors Bonds & Notes Trade Credits Loans (5,324.1) (65.9) Currency and Deposits Other Liabilities Short-Term (391.3) (29.2) Loans from Direct Investors Money Market Instruments Trade Credits (391.3) (29.2) Loans Currency and Deposits Other Liabilities * Provisional. - As of September 2008, the on lending activities of the Central & Local government have been reported under Central & Local government debt rather than the Other Sectors as was the case prior to the reclassification.

29 Table (7) Exchange Rates (In piasters per foreign currency unit) First: Interbank Rates * Minimum Maximum Weighted average End of June June Second : Market Rates Buy Sell Buy Sell US Dollar Euro Pound Sterling Swiss Franc Japanese Yens Central Bank of Egypt - External Position Saudi Riyal Kuwaiti Dinar UAE Dirham Chinese Yuan Source: CBE daily exchange rates. * The Interbank rates were launched on December 23,

30 Central Bank of Egypt External Position Appendix II Table Page I- Medium-and Long-Term External Debt A- Outstanding Stock Public and Publicly Guaranteed a. By Creditor Country b. Paris Club Debt (1) Third Stage of the Agreed Minute of May 25, (2) Post Cut Off Date c. Non-Paris Club Debt d. Multilateral Agencies Private Sector, Non-Guaranteed B. Outstanding External Short-Term Debt C. Disbursed and Undisbursed Amounts of Contracted Loans II- Projected Medium- and Long-Term External Debt Service Public and Publicly Guaranteed Paris Club Debt a. Third Stage of the Agreed Minute of May 25, b. Post Cut Off Date Non-Paris Club Debt Multilateral Agencies Projected Sovereign Bonds Projected Guaranteed Notes Projected Egyptian Pound Euro Bond III- Exchange Rates of the Currencies of External Debt Versus US Dollar 21 51

31 Central Bank of Egypt - External Position 25 (US$ million) {1} Total Debt Medium-and Long-Term Public & Publicly Guaranteed Debt 27, , , , A. Paris Club Debt 19, , , , May 1991 (Third Stage) 15, , , , Non-Rescheduled Debt 4, , , , B. Non-Paris Club Debt C. Multilateral Agencies 5, , , , D. Sovereign Bonds E. Guaranteed Notes 1, , , , F. Arab International Bank Deposits {2} G. Egyptian Pound Euro Bond , Private Sector, Non-Guaranteed Short-Term Debt 1, , , , Deposits (Non Residents) , , Other , Grand Total 29, , , , {1} Using end of period exchange rate. {2}As of December 2004, the deposit of the Arab International Bank was converted from a short- term debt to a long- term deposit. Figure 1-1 ( US$ bn ) Table ( 1 ) Outstanding Stock as at End of June External Debt Outstanding Stock as at End of June

32 Figure 1-2 Egyptian Pound Euro Bond Guaranteed Notes 1% 4% Multilateral Agencies 28% Medium- and Long-Term Public and Publicly Guaranteed External Debt Outstanding Stock as at End of June 2009 Non-Paris Club Debt 3% Sovereign bonds 1% Paris Club Debt 63% Central Bank of Egypt - External Position 26

33 Central Bank of Egypt - External Position 27 Country Table ( 2 ) Medium- and Long-Term Public & Publicly Guaranteed External Debt by Creditor Country Outstanding Stock as at End of June (US$ million) {1} Total Debt Int'l Organization 5, , , , France 4, , , , Germany 3, , , , Japan 3, , , , United States 4, , , , Guaranteed Notes 1, , , , Spain Kuwait Italy Austria Egyptian Pound Euro Bond , Switzerland Sovereign Bonds Denmark United Kingdom Canada Australia China The Netherlands Belgium United Arab Emirates Sweden Saudi Arabia Norway Bahrain Czech Republic Lebanon Syrian Arab Rep Others Jordan Grand Total 27, , , , {1} Using end of period exchange rate.

34 Figure 2 Germany 13% United States 12% Japan 13% Medium- and Long-Term Public and Publicly Guaranteed External Debt by Creditor Country Outstanding Stock as at End of June 2009 Guaranteed Notes 4% France 14% Int'l Organizations 28% Other Countries 16% Central Bank of Egypt - External Position 28

35 Central Bank of Egypt - External Position 29 Country France 4, , , , Japan 3, , , , Germany 3, , , , United States 4, , , , Spain Italy Austria Switzerland Denmark Canada United Kingdom Australia The Netherlands Belgium Sweden Norway Grand Total 19, , , , {1} This table sums up tables 4 and 5. {2} Using end of period exchange rate. Figure Table ( 3 ) {1} Medium- and Long-Term Public & Publicly Guaranteed External Debt Paris Club Debt Outstanding Stock as at End of June Total Debt Medium- and Long-Term Public & Publicly Guaranteed External Debt Paris Club Debt Outstanding Stock as at End of June (US$ million) {2} ( US$bn )

36 Central Bank of Egypt - External Position 30 Table ( 4 ) Medium- and Long-Term Public & Publicly Guaranteed External Debt Paris Club Debt Third Stage of the Agreed Minute on May 25, 1991 Outstanding Stock as at End of June Country Total Debt (US$ million) {1} France 3, , , , United States 3, , , , Japan 2, , , , Germany 1, , , , Spain Austria Switzerland Italy United Kingdom Canada Australia Denmark The Netherlands Belgium Sweden Norway Grand Total 15, , , , {1} Using end of period exchange rate. Figure Medium- and Long-Term Public & Publicly Guaranteed External Debt Paris Club Debt Third Stage of the Agreed Minute on May 25, 1991 Outstanding Stock as at End of June ( US$bn )

37 Central Bank of Egypt - External Position 31 Table ( 5 ) Medium- and Long-Term Public & Publicly Guaranteed External Debt Paris Club Debt Non-Rescheduled Debt Outstanding Stock as at End of June Country Total Debt (US$ million) {1} Germany 1, , , , Japan France United States Italy Spain Denmark Austria Switzerland Canada Belgium Sweden The Netherlands United Kingdom Grand Total 4, , , , {1} Using end of period exchange rate. Figure 5-1 5,000 4,800 Medium- and Long-Term Public & Publicly Guaranteed External Debt Non-Rescheduled Debt Outstanding Stock as at End of June ( US$ mn ) 4,600 4,400 4,200 4,000 3,

38 Figure 5-2 Non- rescheduled Debt 23% Medium- and Long-Term Public and Publicly Guaranteed External Debt Paris Club Debt Outstanding Stock as at End of June 2009 May 1991 (Third Stage) 77% Central Bank of Egypt - External Position 32

39 Central Bank of Egypt - External Position 33 Table ( 6 ) Medium- and Long-Term Public & Publicly Guaranteed External Debt Non-Paris Club Debt Outstanding Stock as at End of June Country Total Debt (US$ million) {1} Kuwait China United Arab Emirates Saudi Arabia Bahrain Czech Republic Lebanon Germany Syrian Arab Rep Jordan Grand Total {1} Using end of period exchange rate. Figure 6 1,200 1,000 Medium- and Long-Term Public & Publicly Guaranteed External Debt Non-Paris Club Debt Outstanding Stock as at End of June ( US$ mn )

40 Central Bank of Egypt - External Position 34 Table ( 7 ) Medium- and Long-Term Public & Publicly Guaranteed External Debt Multilateral Agencies Outstanding Stock as at End of June Creditor Total Debt (US$ million) {1} European Investment Bank 1, , , , IBRD , , , IDA 1, , , , African Development Bank , Arab Fund for Economic and Social Development , , , African Development Fund Arab Monetary Fund International Fund for Agricultural Development Arab Trade Financing Program OPEC Islamic Development Bank Nordic Investment Bank Arab International Bank Grand Total 5, , , , {1} Using end of period exchange rate. Figure ,000 8,000 Medium- and Long-Term Public & Publicly Guaranteed External Debt Multilateral Agencies Outstanding Stock as at End of June ( US$mn ) 6,000 4,000 2,

41 Figure 7-2 IBRD 22% African Development Bank 13% Others 5% Medium- and Long-Term Public & Publicly Guaranteed External Debt Multilateral Agencies Outstanding Stock as at End of June 2009 African Development Fund 3% AFESD 13% IDA 18% European Investment Bank 26% Central Bank of Egypt - External Position 35

42 Central Bank of Egypt - External Position 36 Table ( 8 ) Medium-and Long-Term Private Sector Non-Guaranteed External Debt Outstanding Stock as at End of June Country Total Debt (US$ million) {1} United States Bahrain Int'l Organizations Austria Germany Japan Italy Grand Total {1} Using end of period exchange rate. Figure Medium-and Long-Term Private Sector Non-Guaranteed External Debt Outstanding Stock as at End of June ( US$mn )

43 Central Bank of Egypt - External Position 37 Table ( 9 ) Short-Term Debt Outstanding Stock as at End of June (US$ million) Total Debt Short-Term Debt Deposits (Non-Residents) , , Trade Credits , Cash Loans Banking Facilities Grand Total 1, , , , Figure 9 3,000 Short-Term Debt Outstanding Stock as at End of June 2,500 2,000 ( US$mn ) 1,500 1,

44 Central Bank of Egypt - External Position 38 Table ( 10 ) Disbursed and Undisbursed Amounts of Contracted Loans as at End of June 2009 (US$ million) {1} Contracted Cancelled Net Disbursed Undisbursed Amounts Amounts Commitment Amounts Amounts 1- Medium and Long-Term Public & Publicly Guaranteed Debt 68, , , , , A. Paris Club Bilateral Debt 41, , , May 1991 (Third Stage) 23, , , Non-Guaranteed Debt 2, , , Non-Rescheduled Debt 16, , , B. Non- Paris Club Bilateral Debt 4, , , C. Multilateral Agencies 22, , , , , Medium and Long-Term Private 1, , , Sector Non-Guaranteed Debt Grand Total 69, , , , , {1} Using end of period exchange rate. Figure 10 Disbursed and Undisbursed Amounts of Contracted Loans as at End of June 80,000 70,000 60,000 50,000 ( US$mn ) 40,000 30,000 20,000 10, Contracted Amounts Net Commitment Disbursed Amounts

45 Central Bank of Egypt - External Position 39 Table ( 11 ) Projected Medium- and Long-Term Public & Publicly Guaranteed External Debt Service as of July 1, 2009 Period Principal Interest Total Period Principal Interest Total 2009/H /H /H /H /H /H /H /H /H2(*) /H /H /H /H2 (**) /H /H /H /H /H /H /H /H /H /H /H /H2(***) /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H Grand Total 29, , , {1} The exchange rate of June 30, (*) Includes US$ million sovereign bond maturing. (**) Includes US$ million Egyptian pound Euro Bond maturing. (***) Includes US$ 1250 million guaranteed notes maturing. (US$ million) {1}