World Economy Improvement Raises IMF Concern over Egypt

World Economy Improvement Raises IMF Concern over Egypt
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World Economy Improvement Raises IMF Concern over Egypt

World Economy Improvement Raises IMF Concern over Egypt

The International Monetary Fund (IMF) has placed the monetary policies adopted by the central banks of US and Europe as top risks facing the Egyptian economy during the coming period, knowing that these policies would contribute to the re-balance of the dollar and Euro against the Egyptian pound.

The United States and Europe started after the world financial crisis to apply exceptional monetary policies that aim at keeping the interest rates low and interfering fiercely in the bond market to rescue the economy from recession.

As the signs of economic re-balance started to show, these two economic entities started to withdraw gradually from the monetary policies. Commenting on these policies, the IMF said that in case any unexpected transformations took place in the world financial condition, this would weaken the market's attraction towards Egyptian pound bonds.

Egypt depends on Euro bonds as one of the major sources to fill the gap of foreign currency resources amidst a fragility shown by the tourism sector in light of the security crises and the failure of foreign investments to reach the targeted average determined by the government. Egypt sold international bonds worth USD1.5 million in June 2015, for the first time since the January revolution in 2011. Further, it signed a loan deal in November under the framework of foreign funding.

IMF warned from risks of the rise in oil prices, which would weaken the balance of the current account, increase the subsidy of fuels and affect negatively the public debt. On the local level, the fund warned from the slump of economic reforms whether due to exhaustion from reform procedures, the resistance from business owners or the authorities concerns regarding social tensions.

It also warned from unannounced interventions in the currency exchange market in order to control the currency value.



Trump's Baseline Tariff Plays to Türkiye’s Advantage, Vice President Says

Türkiye's Vice President Cevdet Yilmaz speaks during a press conference to unveil a savings measures package in Ankara, Türkiye, May 13, 2024. REUTERS/Umit Bektas/File Photo
Türkiye's Vice President Cevdet Yilmaz speaks during a press conference to unveil a savings measures package in Ankara, Türkiye, May 13, 2024. REUTERS/Umit Bektas/File Photo
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Trump's Baseline Tariff Plays to Türkiye’s Advantage, Vice President Says

Türkiye's Vice President Cevdet Yilmaz speaks during a press conference to unveil a savings measures package in Ankara, Türkiye, May 13, 2024. REUTERS/Umit Bektas/File Photo
Türkiye's Vice President Cevdet Yilmaz speaks during a press conference to unveil a savings measures package in Ankara, Türkiye, May 13, 2024. REUTERS/Umit Bektas/File Photo

The relatively low 10% baseline tariff that the United States has applied to Türkiye could favor Turkish exporters, Türkiye's vice president told broadcaster CNN Turk on Saturday.
Along with the baseline tariff that took effect on Saturday, US President Donald Trump has announced higher levies on goods from 57 larger partners including China, European Union, Vietnam and Japan that are due to start next week.
The decision not to impose such levies on Türkiye "seems to be to our advantage as of now, for access to the American market", Vice President Cevdet Yilmaz told CNN Turk.
"There were already tariffs on iron, steel and aluminium (exports from Türkiye to the US). When (the US) imposed similar tariffs on the others, there was an equalization there, it was in our favour," he added.
Yilmaz said that as an importer, Türkiye would also benefit from a drop in international commodity prices, including oil, following Trump's announcement.
Türkiye's Trade Minister Omer Bolat said on Friday that the Turkish government wanted to negotiate with the US to lift the 10% in new tariffs.
He called them the "best of the worst", given higher tariffs on many other countries.