The parliament’s economic committee plans to discuss a loan offered from the Arab Monetary Fund (AMF) worth $243m on Tuesday, so as to prepare a report on the loan and submit it to the House of Representatives for approval.
MP Ashraf El-Araby said the Central Bank of Egypt (CBE) will receive the loan to support its foreign exchange reserves with an interest rate of 1.2% in addition to a 0.25% service fee.
The total foreign reserves at the CBE recorded $17.01bn in April, an increase of $449m compared to March.
El-Araby said that vice governor of the CBE Gamal Negm submitted a statement about the CBE’s current and future monetary policy.
Negm affirmed that the CBE’s current policy seeks to increase its foreign exchange reserves and decrease inflation.
Daily News Egypt reported on Saturday that the economic committee will summon the CBE’s governor, Tarek Amer, to discuss the provision of dollars for factories to buy required materials for the production process.
The industrial committee will request the provision of 20% to 30% of the dollar surplus every month to the industrial sector, in addition to the CBE’s weekly dollar bid.
Parliamentary sources said that the CBE is waiting for the United Arab Emirates’ deposit of $2bn to repay the Qatari deposit worth $1bn, due in July, and $800m to Paris Club of creditor nations.
Negm told some MPS that the CBE provides foreign currency to buy strategic materials and commodities and the factories have to secure their dollar requirements from the informal market, the sources said.
Industry committee chairperson Mohamed Saad Badrawi said the US dollar exchange rate ranged between EGP 10.60 and EGP 10.8 at the beginning of this week. He added if the industrial sector secures its US dollar requirements from the informal market, it would drive the exchange rate up to well above EGP 11. Such an increase would be a burden on consumers.
Badrawi added that the provision of the US dollar for the industrial sector will contribute to increased dollar reserves by increasing non-oil exports at the end of the year.
Minister of Industry and Foreign Trade Tariq Qabil told Daily News Egypt that the earnings of non-oil exports during the first quarter (Q1) of 2016 increased to $200m compared to Q1 of 2015, while the imports decreased to $2.8bn.
Badrawi explained that the growth in non-oil exports will increase significantly in case of the provision of foreign currency for the industrial sector to buy required material and operate the stalled production lines. He added that the customs restrictions on imports have contributed to the decline in imports.