The head of the IMF praised Egypt’s recent austerity measures on Tuesday and called on the world lender’s Executive Board to finalize a US$12 billion loan package to help rebuild the economy of the Arab world’s most populous country.
Egypt’s long-running financial woes have worsened in recent weeks amid a dispute with Saudi Arabia, which provided billions of dollars in aid after the military ousted an elected Islamic leader in 2013, but cut off fuel shipments last month over a dispute related to the Syrian conflict.
IMF managing director Christine Lagarde praised Egypt’s decision last week to float its currency and slash fuel subsidies, measures that have hiked the price of basic goods, but which she said would shore up its reserves, attract foreign investment and reduce its budget deficits.
“The Egyptian authorities have embarked on an ambitious reform program to put the country’s economy on a sustainable path and achieve job-rich growth,” she said.
She said she would recommend that the IMF Executive Board approves Egypt’s request for US$12 billion in loans when it meets tomorrow.
Egypt’s shares rose for a fourth consecutive business day, with the benchmark EGX 30 Index closing up 2.48 percent on Tuesday. The Egyptian pound traded at banks on Tuesday at about 17.75 to the US dollar, nearly twice the dollar’s official, pre-float exchange rate.
The Egyptian pound was trading at an all-time low of 18.50 to the US dollar in the parallel black market prior to the float.
Meanwhile, an Egyptian court upheld a ruling by a lower tribunal that annulled Egyptian President Abdel-Fattah al-Sissi’s decision to transfer two strategic Red Sea islands to Saudi Arabia, a move that could further escalate tensions between the two formerly close allies.
Saudi Arabia had agreed in April to provide Egypt with 700,000 tonnes of fuel a month for five years on easy repayment terms, but Egypt on Monday said that the fuel shipments have been suspended.
Cairo angered the Saudis last month by voting for a Russian-backed UN Security Council resolution on Syria that was opposed by Riyadh.
Saudi Arabia is a leading supporter of the rebels fighting to topple Syrian President Bashar al-Assad, while Egypt fears the rise of Muslim militants and has pushed for a negotiated solution that might keep him in power.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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