عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Egypt to Join the New Development Bank within Weeks

Negotiations between Egypt's delegation and the New Development Bank (NDB) (Asharq Al-Awsat)
Negotiations between Egypt's delegation and the New Development Bank (NDB) (Asharq Al-Awsat)
TT
20
TT

Egypt to Join the New Development Bank within Weeks

Negotiations between Egypt's delegation and the New Development Bank (NDB) (Asharq Al-Awsat)
Negotiations between Egypt's delegation and the New Development Bank (NDB) (Asharq Al-Awsat)

Egypt is moving forward with the procedures of officially joining the New Development Bank (NDB), which was established by the BRICS countries to enhance cooperation in infrastructure and sustainable development.

The Egyptian parliament is scheduled to officially discuss the final procedures for Cairo to join the Bank in the coming weeks.

BRICS is a prominent global economic bloc that includes Brazil, Russia, India, China, and South Africa. Algeria recently announced its desire to join the coalition.

Egyptian Finance Minister Mohamed Maait affirmed his country's keenness to enhance cooperation with international development partners, especially in light of the unprecedented development movement in Cairo.

Maait hoped this would lay the foundations of comprehensive and sustainable development, provide investment and development opportunities, improve citizens' living standards, meet their development needs, and improve the quality of public services.

During his meeting with the NDB President, Marcos Troyjo, the minister added that Egypt looks forward to building a solid partnership with the Bank, which has enormous financing capabilities, international expertise, and advanced infrastructure to help Egypt meet its financing needs and maximize its efforts to develop infrastructure.

Maait explained in a press statement by the Ministry of Finance that the NDB is a new platform for Egypt to enhance cooperation with BRICS countries and other emerging and developing economies' infrastructure and sustainable development.

He pointed out that the New Development Bank's strategy is in line with Egypt's vision for sustainable development, asserting that Cairo looks forward to strengthening cooperation between the two sides to achieve green and sustainable economic growth.

For his part, Troyjo said that the New Development Bank is proud of establishing a solid relationship with Egypt, especially in light of the promising opportunities explored together during the UN Climate Summit (COP27).

NDB aspires to jointly advance on key sustainable development issues across emerging economies, including climate action, said Troyjo.

Russia established the BRICS on September 20, 2006, when the group's first ministerial meeting was held on the sidelines of the United Nations General Assembly.

During the BRICS summit in Brazil in 2014, the official agreed to establish a development bank and adopt a treaty to set up an emergency reserve for the group, which now owns a total of $200 billion.

BRICS established the Bank to mobilize resources for infrastructure and sustainable development projects in emerging market economies and developing countries.

The initial authorized capital of the Bank is $100 billion divided into 1 million shares having a par value of $100,000 each. It is open for subscription for UN members.

The New Development Bank has begun to expand its membership in 2021, accepting Bangladesh, the UAE, Uruguay, and Egypt.

Most Viewed

 
Business

Vujcic: ECB Should Not 'Overreact' if Inflation Edges Below 2%

FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo
TT
20
TT

Vujcic: ECB Should Not 'Overreact' if Inflation Edges Below 2%

FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo

The European Central Bank should not "overreact" to euro-zone inflation edging below its 2% target as there are good reasons to believe it will come back up, ECB policymaker Boris Vujcic told Reuters.

The ECB cut interest rates on Thursday for the eighth time in a year but signaled at least a policy pause next month, despite projecting inflation at just 1.6% next year. Inflation in the 20 countries that share the euro was 1.9% in May, according to a flash reading published last week.

Vujcic, who is also Croatia's central bank governor, said price growth was likely to bounce back later and that monetary policy should not try to do "precision surgery" on small fluctuations from its goal.

"A few tens of basis points' deviation on either side of the target is not a problem," Vujcic said in an interview on Saturday in Dubrovnik. "Because you will always have small deviations. If you consider them as a problem, then you will overreact. This is not precision surgery."

Vujcic said it was reasonable to expect inflation to edge back up as energy prices find a bottom and the economy accelerates. Euro strength is also unlikely to have second-round effects on prices unless it lasts several quarters, Vujcic said.

Some ECB policymakers, especially Portugal's central bank governor Mario Centeno, worry that euro-zone inflation may slow too much.

Vujcic said he sees the risks surrounding the inflation outlook as "pretty balanced" but cautioned there was "complete uncertainty" surrounding global trade tensions with US President Donald Trump's administration.

Vujcic recalled advice he received as a young deputy governor from then-Federal Reserve Chair Alan Greenspan: a high rate of inflation was more dangerous than a low one. Greenspan cited two decades of relatively benign deflation in the late 19th century, which was partly due to improvements in productivity, Vujcic said.

"Nobody cared about low inflation because of the productivity growth," he said. "You have a monetary policy problem to bring it up. Yes, but why would you insist so much if you don't have a problem in the economy?"

The ECB is reviewing its long-term strategy, including the role of massive bond purchases, or quantitative easing, in reviving inflation when it is too low.

The ECB injected some 7 trillion euros ($8 trillion) of liquidity into the banking system through QE and other tools over the past decade. These schemes were blamed for inflating bubbles in real estate and setting up the central bank for sizeable losses.

"The next time around, people will take the lessons from the previous episode, and I think that the bar for QE would be higher," Vujcic said.

He said QE could help stabilize dysfunctional markets - such as during the 2008 financial crisis and the COVID-19 pandemic - but if used "for years and years to try and bring inflation up, its marginal efficiency declines".

Such calls for self-criticism are shared by some policymakers in the ECB's hawkish camp. But sources told Reuters they were unlikely to feature in the ECB's new strategy document, to be published this summer.