Egypt Expects $12 Bn in Gas Revenues in 2022

A view of a gas plant seen from the desert road of Suez outside Cairo. (Reuters)
A view of a gas plant seen from the desert road of Suez outside Cairo. (Reuters)
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Egypt Expects $12 Bn in Gas Revenues in 2022

A view of a gas plant seen from the desert road of Suez outside Cairo. (Reuters)
A view of a gas plant seen from the desert road of Suez outside Cairo. (Reuters)

Egypt's gas revenues are expected to reach $12 billion, and about $7 billion from oil derivatives and petrochemicals, announced petroleum minister Tarek el-Molla.

Molla spoke to Skynews Arabia on Monday on the sidelines of his participation in the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC).

He said that Egypt aims to increase liquified natural gas (LNG) exports to eight million tons this year, adding that the country can export up to 12 million tons of LNG annually.

Egypt depends on gas exports to increase the foreign currency when the country is suffering from a scarcity of the dollar, which causes problems for exporters.

For the third time since 2016, Egypt has liberalized the exchange rate, causing the pound to lose about 50 percent of its value since the beginning of this year.

On Thursday, Egyptian authorities liberalized the exchange rate to end the black market, where the dollar price reached 24 to 25 EGP, coupled with the Central Bank of Egypt's (CBE) decision to raise interest rates by two percent.

An International Monetary Fund (IMF) official said that Egypt's move to raise interest rates is a step in the right direction, and a flexible exchange rate will help protect its economy from shocks during tightening global financial conditions.

Egyptian authorities pledged a "durably flexible" exchange rate with a staff-level agreement for a $3 billion IMF extended fund facility.

The central bank also raised interest rates by 200 basis points in an out-of-cycle meeting.

"The measures that the central bank took last week in hiking interest rates goes in the right direction. It is very important to control inflation," the director of the IMF's Middle East and Central Asia Department, Jihad Azour, told Reuters.

"The move to a flexible exchange rate will help the Egyptian economy to be protected from term-of-trade shocks as well as external shocks, especially at a time when global financial conditions have tightened and become more challenging," he said.

Egypt has been struggling to cope with the impact of the war in Ukraine, which led to rapid outflows of portfolio investments, a hike in the commodity import bill, and a drop in tourism revenues.

The IMF said on Thursday that a flexible exchange rate regime should be "a cornerstone policy" for rebuilding and safeguarding Egypt's external resilience.

It confirmed a staff-level agreement on a $3 billion, 46-month Extended Fund Facility.

It said the deal was expected to catalyst a large, multi-year financing package, including about $5 billion in the fiscal year ending June 2023, reflecting "broad international and regional support for Egypt."

Asked if there were assurances on assistance from wealthy Gulf states, Azour said: "Yes, and some of the Gulf authorities already issued statements in support of the program."

He said the $5 billion for FY2022-23 would be in addition to the extension of Gulf states' deposits in Egypt's central bank.

He said that any steps by Egypt that increase predictability and bring confidence back are welcomed and allow Egypt to cover its financing needs.

"We see that through these programs, there are enough financing assurances to cover their (Egypt's) external financing needs," he added.



Gold Firms; Focus on US Data for Cues on Fed's Policy Path

FILE PHOTO: A woman looks at a gold bangle inside a jewellery showroom at a market in Mumbai January 15, 2015. REUTERS/Shailesh Andrade//File Photo
FILE PHOTO: A woman looks at a gold bangle inside a jewellery showroom at a market in Mumbai January 15, 2015. REUTERS/Shailesh Andrade//File Photo
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Gold Firms; Focus on US Data for Cues on Fed's Policy Path

FILE PHOTO: A woman looks at a gold bangle inside a jewellery showroom at a market in Mumbai January 15, 2015. REUTERS/Shailesh Andrade//File Photo
FILE PHOTO: A woman looks at a gold bangle inside a jewellery showroom at a market in Mumbai January 15, 2015. REUTERS/Shailesh Andrade//File Photo

Gold prices hovered near a four-week peak on Thursday, while focus shifted to jobs report due on Friday for clarity on the Federal Reserve's 2025 interest rate path.
Spot gold edged 0.1% higher to $2,664.30 per ounce, as of 0732 GMT. US gold futures rose 0.4% to $2,681.80
"Prices are trading in a narrow range ... A new trigger is needed for gold to breach its resistance," said Ajay Kedia, director at Kedia Commodities in Mumbai.
The bullion hit a near four-week high in the previous session after a weaker-than-expected US private employment report hinted that the Fed may be less cautious about easing rates this year.
The market now awaits US jobs report on Friday for more cues on the Fed's policy path.
Investors are also awaiting Donald Trump to take office on Jan. 20 and his proposed tariffs and protectionist policies are expected to fuel inflation.
Policymakers at the Fed's last meeting also "noted that recent higher-than-expected readings on inflation, and the effects of potential changes in trade and immigration policy, suggested that the process could take longer than previously anticipated," the minutes showed on Wednesday.
Bullion is considered an inflationary hedge, but high rates reduce the non-yielding asset's allure.
"We believe the bulk of the rally has been put in and that while gold's upward momentum may carry it higher in the near term and in early 2025, a combination of physical and financial market factors may tame the rally and drive gold moderately lower by the end of next year," HSBC said in a note.
Elsewhere, physically-backed gold exchange-traded funds (ETFs) registered their first inflow in four years, the World Gold Council said.
Spot silver added 0.2% to $30.17 per ounce, platinum dropped 0.3% to $952.54 and palladium shed 0.8% to $921.37.