THE WEEKLY EL-SISI IN WASHINGTON IN THIS ISSUE ISSUE 13 6 TH APRIL, 2017

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1 EL-SISI IN WASHINGTON President Abdel Fattah El-Sisi started on the 1 st of April an official visit to the United States (US), marking the first visit to the US by an Egyptian President since 2009, as well as the first under President Trump s administration. El-Sisi met with the US President, Donald Trump, who vowed to firmly support Egypt and cooperate with it in fighting terrorism. The visit opens a new chapter for American-Egyptian relations, after being strained under former US President Barack Obama. El-Sisi also met with key American officials including US Secretary of State, Rex Tillerson, and a number of US officials, representatives and senators. He also met with the president of the World Bank, Jim Yong Kim, where they discussed Egypt s top economic issues and the cooperation in a number of sectors, of which energy and transportation. I just want to let everybody know, in case there was any doubt, that we are very much behind President El-Sisi. He s done a fantastic job in a very difficult situation. We are very much behind Egypt and the people of Egypt Donald Trump US President Ahram Online 3 rd April 2017 I look forwad to a fresh start of Egyptian-US ties following fruitful talks in Washington with the US president a day earlier Abdel Fattah El-Sisi Ahram Online 4 th April 2017 IN THIS ISSUE Egypt s Banking Sector Updates Foreign Reserves Hike Banks Acquire USD17 BN Since Flotation Moody s Praises Improvement In The Egyptian Economy Customs US Dollar Decreases 1

2 EGYPT S BANKING SECTOR UPDATES The Central Egypt (CBE) released its monthly statistical bulletin that tracks the performance of the Egyptian banking sector at the end of December 2016, as shown in the following table: EGP BILLION DEC DEC Y/Y Securities and Investments in T-Bills 1, , % Loans and Discount Balances 1, % Assets 3, , % Provisions % Deposits 2, , % The Corporate sector accounted for 58.4% of total credit facilities, while household deposits acquired 61.57% of total deposits at the end of December Banks working in the Egyptian market achieved net profits of EGP billion during the period until December 2016, according to the CBE. These profits have been achieved during the period from January 2016 until December 2016 for private banks, and from July until December 2016 for government banks Banks Aggregate Financial Position The CBE Official Website Egypt s foreign reserves recorded its highest level since March 2011, rising to USD28.5 billion by the end of March 2017 compared to USD26.5 billion in the end of February. This rise was mainly driven by the inflow of USD1 billion loan from the World Bank. Egypt also received the second tranche (worth USD500 million) of the USD1.5 billion loan from the African Development Bank (AFDB) which will be directed to achieve social and economic development by creating new jobs and improving the business environment. A CBE official declared that foreign currency inflows into the banks operating in Egypt reached about USD17 billion since floating the Egyptian pound in November. 2

3 Moody s Ratings agency praised the improvement being witnessed in the Egyptian economy, yet warned about a public dissatisfaction, which will likely lead the government to slow the ongoing reforms. Moody s expects Egypt to reduce its fiscal deficit to 11% of GDP for FY 2017, higher than the IMF s forecast of 10%, and above the targeted 9% deficit declared by the Egyptian Cabinet. Ambitious fiscal consolidation targets will be challenging to achieve and could face implementation risks in a scenario of mounting public discontent Steffen Dyck Co-author of Moody s Report Al-Mal Newspaper 2 nd April 2017 Finance Minister, Amr El-Garhy, announced decreasing the customs US Dollar to EGP16.5 per Dollar from EGP17.0, as of April The customs exchange rate was revised to be around 10% below the market price of the US Dollar, aiming to decrease the cost of production and control inflation. The CBE reported that Egypt s foreign debt increased by 40.8% to reach USD billion in December 2016, up from USD47.8 billion in December The foreign debt amounted to 37.6% of Egypt s GDP in December 2016 compared to 13.6% in the same period last year. The CBE is keen on repaying foreign obligations on time, depending on large flows and strong reserves of foreign exchange Tarek Amer Governor of the CBE Daily News Egypt 27 th March

4 EGYPT AT GLANCE EXCHANGE RATES USD EUR STERLING POUND TH MAR TH MAR TH APR ND JAN Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 EGP per USD EGP per Euro EGP per Pound Sterling STOCK MARKET 13, TH MAR 17 6 TH MAR 17 6 TH APR 16 2 ND JAN 17 EGX30 13,099 12,995 12,623 7,460 12,291 EGX EGX100 1,353 1,328 1, ,099 T-BILLS AUCTION AUCTION DATE 2 ND APR 17 2 ND APR 17 INTEREST RATES GLOBAL COMMODITY PRICES MATURITY (DAYS) AVERAGE YIELD (%) OVERNIGHT DEPOSIT RATE OVERNIGHT LENDING RATE CORRIDOR RATE *AT NOVEMBER 2016 BRENT CUDE* GOLD** WHEAT*** 1, *USD/BARELL **USD/OUNCE SOURCE: BLOOMBERG **AT JUNE 2016 CURRENT* 14.75% 504 1, , **USD/BU PREVIOUS** , ,099 1, , TH MAR 17 6 TH MAR 17 6 TH APR 16 2 ND JAN , CONSUMER PRICE INDEX AND MAJOR COMPONENTS HEADLINE- ALL ITEMS FOOD AND BEVERAGES TOBACCO AND RELATED PRODUCTS CLOTHING AND FOOTWEAR HOUSING, WATER, ELECTRICITY AND GAS FURNISHINGS AND HOUSEHOLD EQUIPMENT 3.77% MEDICAL CARE TRANSPORTATION COMMUNICATIONS RECREATION AND CULTURE EDUCATION HOTELS, CAFES AND RESTAURANTS MISCELLANEOUS GOODS AND SERVICES WEIGHT IN FEBRUARY FEBRUARY BASKET % % 39.92% 2.19% 5.41% 18.37% 6.33% 5.68% 3.12% 2.43% 4.63% 4.43% 3.73% (INDEX) (JANUARY 2010=100) Y/Y 30.25% 40.52% 26.55% 23.36% 7.79% 31.51% 35.58% 28.81% 1.80% 16.26% 12.32% 33.45% 35.97% 4

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