central bank of egypt economic review vol. 51 no. 4 …...suez canal 0.3 wholesale and retail trade...
TRANSCRIPT
CENTRAL BANK OF EGYPT
ECONOMIC REVIEW
Vol. 51 No. 4
2010/2011
Statistics and Economic Reports Sector
The Economic Review is issued by the Statistics and Economic Reports Sector at the Central Bank of Egypt (CBE) on quarterly basis. It aims to avail information on the performance of the Egyptian economy during the reporting period to a broad readership of specialists and non-specialists . The Review is published on CBE’s website: www.cbe.org.eg.
Contents Page
Main Macroeconomic Indicators of the Egyptian Economy 2010/2011
Leading Article - Estimation of Money Demand Function in Egypt (1991/2009) 1 1- Macroeconomic Performance 1/1- GDP (at factor cost and 2006/2007 prices) …………………………1/2- GDP by Expenditure (at 2006/2007 market prices)..........................
23 29
1/3- Cotton……………………………………………………………… 31 1/4- Suez Canal………………………………………………………… 36 1/5- Employment and Unemployment…………………………………. 38 1/6- Tourism………………………………………………………. … 40 1/7- Inflation………………………………………………………….. 45 2- Monetary and Banking Developments 2/1 - Monetary and Banking Policy and Monetary Aggregates……….. 50 2/1/1- Monetary Policy…………………………………………………. 50 2/1/2- Reserve Money………………………………………………….. 52 2/1/3- Domestic Liquidity (M2) and Counterpart Assets………………. 56 2/1/4- Payment Systems and Information Technology (IT)……………. 61 2/1/5- RTGS and SWIFT Local Services……………………………….. 63 2/2 - Banking Developments …………………………………………. 65 2/2/1- Banking Reform…………………………………………………. 65 2/2/2- Supervision Sector………………………………………………… 68 2/2/3- Overview of The Aggregate Financial Position of Banks………... 74 2/2/4- Interbank Transactions in Egypt…………………………………. 77 2/2/5- Deposits………………………………………………………….. 77 2/2/6- Lending Activity…………………………………………………. 79 3- Non-Banking Financial Sector 3/1 - Stock Market ……………………………………………………. 81 4- Public Finance and Domestic Public Debt 4/1 - Consolidated Fiscal Operations of the General Government …... 88 4/1/1- Budget Sector …………………………………………………… 89 4/1/2- Budget Sector, NIB and SIFs…………………………………… 93 4/2 - Domestic Public Debt…………………………………………… 95 4/2/1- Debt of the Government (Net)………………………………….. 95 4/2/2- Debt of Public Economic Authorities (Net)……………………. 97
4/2/3- Debt of the National Investment Bank (Net) …………….......... 97 4/2/4- Intra-Debt………………………………………………………. 98 4/2/5- Domestic Public Debt Service …………………………………. 98 5 - External Transactions 5/1 - Foreign Exchange Market……………………………………… 99 5/2 - Balance of Payments…………………………………………. .. 100 5/2/1 - Trade Balance …………………………………………………. 101 5/3 - External Trade………………………………………………….. 101 5/3/1 - Merchandise Export Proceeds by Degree of Processing……….. 102 5/3/2 - Merchandise Import Payments by Degree of Use…………........ 102 5/3/3 - Sectoral Distribution of Merchandise Transactions……………. 103 5/3/4 - Geographical Distribution of Merchandise Transactions………. 105 5/3/5 - Breakdown of Trade by Main Commodities…………………… 106 5/3/6 - Balance of Services and Transfers.…………………………….. 107 5/3/7 - Capital and Financial Account ………………………………… 111 5/4 - International Finance…………………………………………… 113 5/4/1 - Foreign Direct Investment (FDI) in Egypt……………………… 116 5/4/2 - External Official Grants …………………………..…………… 119 5/4/3 - External Debt…………………………………………………… 121 Annex
Statistical Section ………………………………………………………. 129
Main Macroeconomic Indicators of the Egyptian Economy 2010/2011
Total (2011) 1009.45 (Thousand km2) Populated 76.9 (Thousand km2)
Internal Population in mid- 2011 (preliminary) 80.41 (million persons) Annual Growth Rate (%) 2.2 Number of Employees (at End of June) 23.2 (million employees) Annual Growth Rate (%) -2.6
GDP at Market Prices (LE bn) 893.9 Annual Growth Rate (%) 1.8 GDP at Factor Cost (LE bn) 853.9 Annual Growth Rate (%) 1.9
GDP by Sector (A+B)(percentage point) 1.9 A) Productive Sectors 0.9 of which:
Agriculture, Irrigation and Fishing 0.4 Construction and Building 0.2 Extractions (Oil, Natural Gas & Others) 0.1 Manufacturing (Oil Refining & Others) -0.1
B) Services Sectors 1.0 of which:
General Government 0.3
1) Area (Egyptian General Survey Authority)
2) Population and Employment
3) GDP at 2006/2007 Prices
Communications 0.3 Suez Canal 0.3 Wholesale and Retail Trade 0.2 Transportation and Storage 0.1 Tourism -0.2
June 4) Annual Inflation Rate (%) (Month/ Corresponding Month of the Previous FY)
2010 2011
CPI (urban) (January 2010 = 100) 10.1 11.8 PPI by Economic Activity (2004/2005 = 100) 8.6 19.4
End of June 5) Annual Discount and Interest Rates (%)
2010 2011
- CBE Lending and Discount Rate 8.5 8.5 - CBE Overnight Deposit and Lending Rates
Deposit 8.3 8.3 Lending 9.8 9.8
- Interest Rate on Less than 3-Month Deposits 6.3 6.6 - Interest Rate on One Year or Less Loans 11.1 11.0
June 6) US Dollar Exchange Rate Announced by CBE (PT/Dollar)
2010 2011
-Buy and Sell Exchange Rates (Average of the Year) 552.4 582.2 -End of the Year (Average Market Buy Rate) 568.1 595.6
7) Consolidated Fiscal Operations of the General Government
2010/2011 Preliminary Actual
(LE bn) -Total Revenues 296.3 -Total Expenditures 430.6 Cash Deficit/Surplus 134.3 Net Acquisition of Financial Assets -4.3
Overall Deficit 130.0 Total Finance 130.0 -Domestic Finance 135.6
Banking 97.6 Non-Banking 38.0
-Foreign Borrowing 5.0 -Arrears 0.0 -Others 8.0 -Revaluation Differences 3.9 -Net Privatization Proceeds 0.0 -Difference between TBs Face and Present Value -7.4 -Discrepancy -15.1 -Cash Deficit (Surplus) as a Percentage of GDP 9.7 -Overall Fiscal Balance as a Percentage of GDP 9.4 -Expenditures as a Percentage of GDP 31.3 -Revenues as a Percentage of GDP 21.5
End of June 8) Domestic Public Debt (LE bn)
2010 2011 Gross, due on: 888.7 1044.9 -Government Debt (net) 663.8 808.1 -Public Economic Authorities Debt (net) 67.8 66.3 -NIB Debt (net) minus intra-debt 157.1 170.5
End of June 9) Monetary Survey (LE bn) 2010 2011
Domestic Liquidity (M2) 917.5 1009.4
Growth Rate (%) 10.4 10.0 Reserve Money 203.1 251.0
Growth Rate (%) 16.0 23.6 Money Supply (M1) 214.1 248.7
Growth Rate (%) 17.0 16.2 Currency in Circulation/Money Supply (%) 63.2 67.5
Foreign Currency Deposits/Total Deposits (%) 20.2 21.0 Banking System Foreign Assets, of which: 322.2 295.5
CBE Foreign Assets 198.6 156.3 Banking System Foreign Liabilities, of which: 39.8 42.0
CBE Foreign Liabilities 8.4 9.1 Total Deposits with Banks (Excl. CBE) 892.5 957.0
In Local Currency 686.1 724.9 In Foreign Currencies 206.4 232.1
Total Lending and Discount Balances Extended by Banks (Excl. CBE), of which: 466.0 474.1
To Government and Public Economic Authorities 39.4 39.8 To Business Sectors (Public and Private) 317.0 317.4
Portfolio and TBs with Banks (Excl. CBE), of which: 405.9 474.2 TBs and Government Securities 318.6 411.9
Loans/Deposits with Banks (%) 52.2 49.5 Investment in Securities, TBs and Equity Participation/Deposits (%) 45.5 49.5
Fiscal Year 10) Balance of Payments (US$ bn) 2009/2010 2010/2011
Current Account & Transfers (4.3) (2.8) Trade Balance (25.1) (23.8) Merchandise Exports 23.9 27.0
Oil and its Products % 43.0 45.0 Others % 57.0 55.0
Merchandise Imports (49.0) (50.8) Intermediate Goods % 33.2 31.1 Investment Goods % 20.5 20.5 Consumer Goods % 25.0 24.2 Fuel, Raw Materials and Others % 21.3 24.2
Services Balance 10.3 7.9 Receipts, of which: 23.6 21.9
Transportation % 30.6 36.9 Travel % 49.2 48.4 Investment Income % 3.5 1.9
Payments, of which: 13.2 14.0 Transportation % 9.3 9.9 Travel % 17.6 15.1
Investment Income % 39.3 46.2 Transfers 10.5 13.1
Official % 9.1 5.7 Private % 90.9 94.3
Capital and Financial Account 8.3 (4.8) Overall Surplus/(Deficit) 3.4 (9.8)
June 11) Outstanding External Debt (US$ bn)
2010 2011
Total 33.7 34.9 Due on the Government and Public Sector 31.4 33.0 Due on the Private Sector 2.3 1.9
The Leading Article
-1-
Estimation of Money Demand Function in Egypt* (1991-2009)
Abstract
The study aims at estimating the determinants of real money demand in Egypt during the period Dec. 1991 to June 2009, under the concept of co-integration and the error correction framework. To this end, the main determinants of money demand are defined as follows: GDP, the interest rate on less-than-three-month deposits, the yield on treasury bills, and the LE exchange rate vis-à-vis the US dollar. An analysis of the time series properties of the variables has been conducted to determine the order of integration of the time series and the order of integration of each variable using the unit root tests. The existence of an equilibrium relationship between the variables of the model is also verified by the tests of co-integration. The results of these tests indicate that each time series is individually integrated of order 1 and that there is a long run equilibrium relationship between money demand and its explanatory variables. To estimate the long- and short-run effects of the explanatory variables on money demand, two error correction approaches have been used; namely the Engel-Granger two step method (EG) and the Error Correction Model (ECM). The estimation results show that the effects of the explanatory variables (the GDP, interest rate on less-than-three-month deposits, the yield on 90-day TBs, and the LE exchange rate vis-à-vis US dollar) are statistically significant. The results also demonstrate the existence of a short- and long-run stable relationship between real money demand and its explanatory variables as indicated by the cumulative sum (CUSUM) and cumulative sum of squares (CUSUMSQ) tests. The findings of the two approaches show that money demand adjusts its disequilibrium -according to the EG model- every quarter of a year by 14 percent, with a speed of adjustment reaching 1.8 years. However, the speed of adjustment is 5 percent and takes 4.8 years under the ECM model. The paper highlights the important effect of the exchange rate channel as a monetary policy instrument. The findings also indicate that monetary aggregates can serve as an intermediate target for the monetary policy, until the fundamental prerequisites for transiting to the inflation targeting framework are met.
* The paper was prepared by Mrs. Naglaa Nozahie – a general manager in the Statistics and Economic Reports Sector. The first version of this paper was presented at the 45th Annual Conference on Statistics, Computer Science and Operations Research which was held during the period 13–16 Dec., 2010 at the Institute of Statistical Studies and Research, Cairo University.
-2- Introduction
Money demand is considered one of the key economic variables that economic policy makers give due consideration to the tracking of its behavior and identifying its affecting factors, the magnitude of this effect, and the nature and degree of its stability. The importance of this variable stems from its direct influence on the efficiency of economic policies as the stability of money demand and the potential changes thereto are considered the cornerstone of the formulation of the monetary policy. In addition, the sensitivity of this variable to the interest rate affects the efficiency of economic policies. The money demand literature abounds with studies that focus on attempts to identify the factors that affect the behavior of this variable and the magnitude of this effect in both advanced and developing countries.
This study aims at estimating the determinants of real money demand in
Egypt over the period from Dec. 1991 to June 2009, using the concept of co-integration and the error correction framework. To this end, the major determinants of money demand are defined namely, GDP, the interest rate, the yield on T-Bills and the exchange rate of the Egyptian pound vis-à-vis the US dollar. An analysis of the time series properties of the variables has been conducted to determine the order of integration of the time series and the order of integration of each variable using the unit root tests. The existence of an equilibrium relationship between the variables of the model has also been verified by the tests of co-integration. The results of these tests reveal that each time series is individually integrated of order 1 and that there is a short- and long-run equilibrium relationship between money demand and its explanatory variables.
Two-error correction approaches namely the Engel-Granger two step
method (EG) and the Error Correction Model (ECM) are employed to estimate both the long- and short-run effects of the explanatory variables on money demand. The estimation results show that the effects of the explanatory variables (GDP, the interest rate on less-than-three-month deposits, the yield on 90-day TBs, and the LE exchange rate vis-à-vis the US dollar) are statistically significant. The results also show the existence of a short- and long-run stable relationship between real money demand and its explanatory variables, as indicated by the CUSUM and CUSUMSQ tests. In light of the findings of the two approaches, money demand corrects its disequilibrium -according to the EG model- every quarter of a year by 14 percent, with a speed of adjustment
-3-
reaching 1.8 years. However, the speed of adjustment is 5 percent and takes 4.8 years under the ECM model. Moreover, the paper underscores the important effect of the exchange rate channel as a monetary policy instrument. The results also show that monetary aggregates can serve as an intermediate target for the monetary policy, until the fundamental prerequisites for transiting to the inflation targeting framework are met.
The paper is divided into five sections: Section (I) outlines the theoretical
features of the determinants of money demand. Section (2) explains the model employed in the study and how it is formulated. In Section (3), the concept of the “error correction model” and its requirements are defined, using the unit root tests and the co-integration test for the variables of the model. In Section (4), the error correction model is estimated, while Section (5) provides analysis and conclusion of the results reached.
1- Theoretical Features of the Determinants of Money Demand
Although the models of money demand determinants in empirical studies
vary from one country to another, there is a broad consensus that the most frequently used money demand function includes explanatory variables. These comprise a scale variable (S) relating to the size of transactions (usually explained by GDP) and a variable representing the relative gravity of holding money or the opportunity cost (OC). This relation can be expressed as follows: ),( OCSfPM = (1)
Where (M ) represents the nominal value of monetary aggregates and (P )
represents prices. Equation (1) shows that real money demand ( )PM is a function of the chosen scale variable ( S ) (usually expressed by GDP) and the opportunity cost ( )OS variable1.
The selection of the opportunity cost variable depends somehow on the
definition of the used monetary aggregates, either the narrow money (M1)2 or the
1 AMF, 1997 - Macroeconomic Policies: The Empirical Case of Egypt, IMF, Washington D.C.
USA. 2 Money in its narrow definition (M1) is composed of money in circulation outside the
banking system and demand deposits in local currency.
- 4 -
broad money (M2)3. The nominal interest rate can be chosen as it is considered the most appropriate proxy for the opportunity cost of holding money that does not yield interests (the narrow money). As to interest yielding monetary assets, it would be apt to choose a variable that measures the interest rate differentials between cash holdings and other financial assets. Inflation rate is used as a proxy for the rate of return on in-kind assets. In an economy open to the world, foreign financial assets are considered one of the alternatives for holding money. In such a case, the opportunity cost variables comprise the return on foreign assets (such as the yield on U.S. Treasury bills or the Libor rate) and the expected change in local currency exchange rate vis-à-vis the foreign currency. 2- The Model of the Study
Thus, the equation of real money demand in Egypt can be formulated in the following linear form:
(2)
where )(M stands for money supply in its broad definition )( 2M in LE billion,
)( P for the consumer price index (2001/2002=100), )(GDP for the real gross domestic product (scale variable) at market prices (2001/2002=100) in LE billion, )( INT for the interest rate on deposits of less than three months, )( TB for the interest rate on 90-day treasury bills, and )(EX for the LE exchange rate vis-à-vis the US dollar (as it is considered one of the key variables for the cost of holding money in the Egyptian economy). 2/1- Selection of Variables and Model Formulation The study covers the period from December 1991 to June 2009, based on quarterly data. Hereunder are the reasons for selecting these variables, and the methods of handling data problems:
3 Money in its broad definition (M2) is composed of M1, in addition to time & saving deposits in local currency
and time & saving and demand deposits in foreign currencies.
),,,( EXTBINTGDPfpM
=
- 5 -
• Money supply in its broad meaning (domestic liquidity M2), has been selected in view of the fact that local currency time and saving deposits do account for more than two thirds of total deposits4 in the banking system, which signifies the importance of (M2) for measuring the money demand function. Consequently, the real money supply is calculated by the deflation of the M2 variable, using the consumer price index (CPI).
• The gross domestic product (GDP) is considered the key variable that
demonstrates the volume of main activity. The major difficulty posed by GDP variable is the lack of quarterly data of the Egyptian economy before FY 2001/2002. To address this problem, the seasonal index has been extracted from the actual quarterly data for the period (2001/2002-2008/2009) and has been employed to disaggregate GDP of the period covered by the study.
• In relation to the data of the opportunity cost variables, the nominal
interest rate on less than 3-month deposits (INT) has been employed because it is considered the best measure of the opportunity cost for holding monetary assets (M1) that yield no return.
• The interest rate on 90-day Egyptian Treasury bills (TBs) has been used, as
statistics5 indicate that more than 25 percent of the total outstanding balance of treasury bills and bonds are held by other than the banking sector. Therefore, the interest rate is not only a representative for the alternative domestic assets, but is also used as a key policy rate throughout the period (1996-2005).
• In the relevant function, the LE exchange rate versus the US dollar has
been chosen, rather than the interest rate on foreign currency deposits, for two reasons: (1) the layman regards exchange rate differences as an opportunity for quick profit, (2) most payments for external transactions are made in US dollar6.
4 The time and saving local currency deposits accounted for 70 percent of total deposits at the end of March
2010, according to the banking survey data published in the CBE’s Monthly Statistical Bulletin, Vol. (158) May 2010, Table (2).
5 The CBE’s Monthly Statistical Bulletin, various volumes. 6 Though the EU is Egypt’s main trade partner (average Egyptian exports to the EU countries make up 44 percent
of total exports), most of these transactions are paid in US dollar.
- 6 -
• Two dummy variables have been incorporated, one of them is (DUM-SE) where data are not deseasonalized, and the other is (DUM_MP) that reflects change in the monetary policy7.
• The source of the monetary policy data is the CBE, and for the GDP and
CPI data the major source is the Ministry of Economic Development (formerly the Ministry of Planning).
Against this background, the real money demand function can be estimated as follows:
εααααααα +++++++= MPDUMSEDUMLEXTBINTLGDPLM __2 6543210 (3)
Regarding the functional formulation for the estimation of the determinants of real demand on money, it has been found that the logarithm formulation is preferred to the linear formulation (Subramanian S. 2001)8. Thus, equation (3) clarifies the long-term relationship between the money demand function and its determinants.
Whereas: (LM2): is the logarithm for real money supply in its broad meaning (domestic liquidity) and was obtained by dividing domestic liquidity on the CPI; (LGDP): is the logarithm for the GDP; (INT) is the interest rate on less than 3-month deposits; (TB) is the interest rate on 90-day treasury bills; (DUM_SE) is a dummy variable used to neutralize the seasonal impact; (DUM_MP) is a dummy variable reflecting the above mentioned changes in the monetary policy since June 2005; and lastly (ε ) symbolizes the random error term that implies the assumptions of homoscedasticity, the zero expected value and no serial correlation.
2/2- Expectations for the the Model’s Determinants Given that the variables of the selected model are in logarithmic form, except for the interest rate and rate of return on treasury bills, the model’s partial parameters imply the elasticity of demand on money, with respect to
7 The “Corridor System” was launched on 2 June 2005. 8 Subramanian, S., (2001), “Survey of Recent Emprical Money Demand Studies” IMF Staff Paper Vol. 47, No. 3.
- 7 - the explanatory variables on the long-run. Therefore, the variables trend relation-ships are expected to be as follows:
0,,&0, 4321 <> αααα (4)
Whereas, ( 1α ) indicates the elasticity of demand on money relative to GDP, for money demand is expected to be positively related to the GDP. On the other hand, as regards the coefficient ( 2α ) that represents change in real money demand relative to change in domestic interest rate; the interest rate is expected to be positively related to demand for money, as the higher the return on money, the less the incentive to hold assets alternative for money. Conversely, the opportunity cost variables are expected to be negatively related to demand for money. In this sense, the coefficient ( 3α ) that represents demand on money is inversely related to the rate of return on TBs. Consequently, an inverse relationship also exists between coefficient ( 4α ) that expresses the exchange rate elasticity, and demand on money. 3-Error Correction Model Term
The concept of error correction model is based on the assumption of a long-term equilibrium relationship, whereby the equilibrium value of money demand is defined in the light of its determinants. Even though this relationship does exist on the long-run, it seldom materializes. Hence, the values of money demand may differ from its equilibrium value.
The difference between the two values at each time period represents the
equilibrium error, which is adjusted or corrected - wholly or partly - on the long-run. For this reason, this model was called the “Error Correction Model”9. Accordingly, the model assumes the following two types of relationships between money demand as a dependent variable and its determinants as explanatory variables:
• A long-run relationship between money demand (LM2) as a dependent
variable and its explanatory variables [GDP (LGDP), the interest rate on 3-month deposits (INT) and the return on TBs (TB), and the exchange rate (LEX)].
9 Wojciech, W. & others, “New Direction in Econometric Practice General to Specific Modeling, Cointegration
and Vector Autoregression”, Edward Elgar, U.K (pp. 131-134).
- 8 -
• A short-run relationship, that is the contemporaneous or direct relation-
ship between money demand and its determinants in the respective periods which is measured by changes among these variables in each period.
For the estimation of the error correction model, the following is required:
1. Testing the stationarity of the variables’ level, and finding out the order
of stationarity of each variable through the application of the “unit root test”.
2. Making sure of the equilibrium relationship between the model’s
variables, by applying the co-integration test to the variables.
3/1- Unit Root Test The purpose of the unit root test is to examine the characteristics of the time series with respect to money demand (LM2) as a dependent variable and its explanatory variables [GDP (LGDP); the interest rate on less than 3-month deposits (INT), the rate of return on TBs (TB); and LE exchange rate versus the US dollar (LEX)], besides testing the stationarity of variables and identifying the order of integration for each variable per se. In order to test the stationarity of the time series for the variables of the model of the study, the unit root test is conducted using Dickey-Fuller test (DF) through the following equation:
(5)
Whereas: (∆ ) refers to the differences in the time series ( tY ), and the null hypothesis test ( 0:0 ≥δH ) is carried out after embedding unit roots in the series, i.e. it is non-stationary, against the alternative hypothesis ( 0:1 <δH ) of the stationarity of the series. If (δ ) is statistically significant and less than zero ( 0<δ ), we reject the alternative hypothesis of the absence of the unit root, i.e the variable is stationary or stable. The time variable (t) may be included in the previous equation, and if the error term ( tu ) shows autocorrelation, it can be corrected by adding an appropriate number of lag periods. Accordingly, the equation of the unit root test or Augmented Dickey-Fuller (ADF) test should run as follows:
ttt uYY ++=∆ −11 δβ
- 9 -
(6)
Where ε becomes uncorrelated and characterized with white noise. To identify the lag periods, the Akaike Information Criterion (AIC) is used. The null hypothesis ( 0=δ ) is tested by comparing the (τ ) statistic estimated for the parameter (δ ) with tabulated values (Dickey and Fuller). If the statistical value (τ ) is smaller than the ADF critical values, then it is statistically significant and we are able to reject the null hypothesis of the presence of unit roots, which means that the time series is integrated and vice versa. If the series is non-stationary, we carry out the first difference tests for the time series. Table (1) shows the results of these tests on the variables of the model.
Table 1:Result of Unit Root Tests Augmented Dickey-Fuller Test
Intercept Intercept + Trend Non
Variable Test
statistic Lag
Length Test
statistic lag
Length Test
statistic lag
Length Lcpi -4.2684 2 -4.3043 2 -2.290* 2 Lex -3.1088* 2 -4.0108 1 -2.122* 4 Lgdp -15.3275 2 -16.9803 2 -4.9607 2 Tb -8.0066 1 -8.2984 1 -7.9813 1 Int -3.4762 1 -3.8370* 1 -2.9712 3 lm2 -4.73407 2 -4.8396 1 -3.4289 2
* Rejected at 1 percent significance level
t
m
iititt YYtY εαδββ +∆+++=∆ ∑
=−−
1121
- 10 -
The test was performed including three cases; the Intercept, the Intercept and Trend and the “Non" test statistic. The tests have been carried out at 1 and 5 percent significance levels. The unit root tests prove that all variables are individually non-stationary in level but are integrated of first order (Id (1)). These results are consistent with the findings of (Endres10) namely that most of the economic variables are non-stationary in level but become stationary after being first differenced. 3/2 - Co-integration Test
The co-integration theory focuses on the analysis of non-stationary times series. Engle and Granger point out that a linear combination of two or more non-stationary series may be stationary. If such a stationary linear combination (I d (0)) exists, the non-stationary time series are said to be co-integrated of the same order. Accordingly, the level of variables can be used in making regression, which is considered non-spurious in this case, and produces a long-run equilibrium relationship. In such a case, the linear combination of the paper’s model is represented by the following equation:
MPDUMSEDUMLEXTBINTLRGDPLRM __2 6543210 αααααααε −−−−−−−= If the linear combination resulting from the variables of the model is
integrated of zero order (I d (0)), then the variables of the model are co-integrated of the same order. 3/2/1 - Engle-Granger Co-integration Test
The first step of Engle-Granger test is to estimate the regression of the long-run relationship, or what is called the co-integration regression, as follows:
εααααααα +++++++= MPDUMSEDUMLEXTBINTLRGDPLRM __2 6543210
The second step is to obtain the estimated regression residuals (^ε ) from
the long-run equilibrium relationship. The stationarity of (^ε ) is verified by the
following equation: (7)
Where: )0(Idet ≈
10 Nelson & Plosser (1982),"Trends and Random Walk in Macroeconomic Time Series", Journal of Monetary Economics (pp 139-162).
ttttt e+∆++=∆ −− 1
^^
1
^εεδαε
- 11 -
If the statistical value (τ ) of the parameter ( 1
^
−tε ) is significant, then we reject the null hypothesis of the existence of unit roots in the residuals against the alternative hypothesis of the stationarity of residuals. Accordingly, the variables of the model are co-integrated of the same order.
From the above, one can reach a conclusion that the variables of the model
are co-integrated of the same order, despite being a non-stationary time series. Through the co-integration regression, the estimated long-run equilibrium relationship for money demand function indicates the following results:
LM2 = - 2.50 + 0.647*LGDP + 0.002*INT - 0.007*TB - 0.49*LEX + (t) (-8.863)** (10.00)** (0.365) (-1.715)* (-11.764)** 0.0956*DUM_MP+ 0.045*DUM_SE (8) ( t ) (3.855)** (-2.964)** ( 2R = 0.976) (Adj 2R = 0.974) (S.E= 0.052) (SSR=0.174) (F-statistic:432.022) (DW=1.369) * significant at 10% ** significant at 5%
The residuals obtained from the regression equation (8) are co-integrated to give the following equation (9): D(ECM) = -0.669*ECML(-1) - 0.0047*D(ECM(-1)) t (-4.6542) (-0.387) ( 2R =0.358) (DW=1.856)
Comparing the value (t) resulting from the co-integration regression (-4.6542) with the critical values listed in the EG co-integration test (-4.3156) at 5 percent significance level, and the DW value obtained from equation (9) with the Durbin Watson Test11 critical values show the absence of auto correlation.
This illustrates that the unit root hypothesis can be rejected and that there
is co-integration between money demand and its explanatory variables.
11 Rubinfield,D.L., Econometric Model & Economic Forecast, Table(5), pp.568 Daniel (dl=1.46 & du =1.77 df=70)
- 12 - 3/2/2 - Co-integration Regression Durbin Watson (CRDW)
For further verification of the achievement of co-integration between money demand and its explanatory variables, a CRDW test is carried out by comparing the value (D.W=1.369) estimated in the equation of long-run co-integration regression deduced from equation (8) with the critical values in Sargan and Bahargava12 statistics. The null hypothesis (d=0) is tested against the alternative hypothesis of (d=2).
It is clear that the value (D.W=1.369) is greater than the critical values of
the statistics shown in the following table: Therefore, we can reject the null hypothesis, which states that there is no
co-integration against the alternative hypothesis of the existence of co-integration between the variables of the model.
Table (2)
(DW) Statistics Critical Values Level of Significance
0.511 0.01 0.386 0.05 0.322 0.10
3/2/3 - Johansen-Juselius Co-integration Test
The Johansen-Juselius test is noted to be more powerful in testing co-integration than the Engle-Granger test, especially with the presence of more than one variable in the model. Another advantage is that the Johansen-Juselius test is capable of examining and analyzing the mutual interaction between the variables. More importantly, the test can find out if there is a unique co-integration ie. the achievement of co-integration only in case of regressing the dependent variable on independent variables. The results of the test show that in case of the absence of a unique co-integration, the equilibrium relationship between the variables remains unconfirmed13. It tests the null hypothesis that states that the number of unique co-integration vectors is less than or equal to the number (q) that represents the restrictions against the alternative hypothesis of 12 Seddighi, H. and others :Econometrics “A Pratical Approach” pp. 285. 13 Bin Abed El-Adly, “Determinants of Demand on the Saudi Arabian Imports within the Framework of Co-integration and Error Correction” p.24
- 13 -
q=r. The co-integration vectors are identified by the Trace test and that of maximum eigenvalue, that test the null hypothesis of (r) co-integration vector against the alternative hypothesis of (r+1). The trace statistics test pointed to two integration equations, while the maximum eigenvalue test revealed one unique integration at level 1 percent (as shown in the Statistical Annex). The results of maximum eigenvalue test were chosen since this test is more conservative. In turn, the Error Correction Model (ECM) can be employed to these variables to estimate short- and long-run relationships between money demand and its explanatory variables. 4 - Error Correction Model Estimation (ECM)
After making sure that the variables of the time series are non-stationary at level but stationary at the difference, thus proving the existence of co-integration, which reflects a long-run equilibrium relationship between money demand and its explanatory variables, the following two methods were used to estimate the ECM:
4/1- Engel-Granger Two-Step Method
The Engel-Granger method is based on two steps: the first is to estimate the long-run equilibrium relationship referred to as the co-integration regression; and the second is to estimate the ECM to display the relationship on the short-run. The short-run model is estimated by embedding the estimated residuals as an independent variable with one lag in the long-run regression. The long-run equilibrium relationship is shown by equation (8) as follows: LM2 = -2.50 + 0.647*LGDP + 0.002*INT - 0.007*TB – 0.49*LEX + (8) 0.0956*DUM_MP + 0.045*DUM_SE
As for the short-run relationship, the Error Correction Model (ECM) is estimated by using the estimated residuals of the co-integration regression, known as “error correction term”, which by turn is included as an independent variable with one lag along with the differences of non-stationary variables. The equation appears as follows:
- 14 - tt ECMLEXLGDPLM ελααα +−+∆+−∆+=∆ )1()1(2 210 (9) DLM2 = 0.013 - 0.084*DLGDP(-1) - 0.167*DLEX - 0.139*ECM(-1) (t) (4.56) (-2.23) (-2.05) (-2.42) ( 2R = 0.133) (Adj 2R = 0.093) (S.E= 0.022) (SSR=0.031) (F-statistic: 3.46) (DW=1.744) The results of this regression indicate the significance of the error correction term with an expected negative sign, which emphasizes also the long-run equilibrium relationship. The value of the error correction term coefficient (-0.14) denotes that money demand corrects its disequilibrium value in each period (quarter) by 14 percent, i.e. it reaches its equilibrium value in the course of 1.8 year.
4/2 - Error Correction Model Estimation by Johansen Method
The trace statistics and maximum eigenvalue tests are used to identify the co-integration vectors. The results of the maximum eigenvalue test showed one unique significant integration at level 1 percent. By applying the ECM to estimate the short- and long-run relationships between money demand and explanatory variables, we came up with the following results:
Long-run equilibrium relationship LM2 = 1.61 LGDP – 0.10 LEX – 0.20 TB +0.15 INT t: (4.27) (0.34) (-5.58) (3.09) (10) Short-run relationship
t (-2.316) (-0.77) (0.674) (-4.699 ) (0.056) 5- Analysis and Conclusion of Results
The model’s results show a high correlation between the money demand function in Egypt and the selected explanatory variables, despite the statistical insignificance of some explanatory variables. Thus, the signs of the elasticities of
- 15 -
the model’s explanatory variables are consistent with the economic theory. The relationship between money demand and both of the GDP (the variable of the volume of transactions) and the interest rate on deposits is positive, whereas an inverse relationship exists between money demand and the opportunity cost variables; represented in the LE exchange rate versus the US dollar and the rate of return on TBs. Each variable and its statistical significance can be explained as follows:
• Statistical results revealed the degree of significance of the GDP effect on the
money demand function, where a 1 percent increase of the GDP leads to the increase of money demand by 1.61 percent. Though this percentage may exceed 1 percent according to the quantity of money theory, this can only happen in countries where the financial sector is not well developed; in which case the society relies to a large extent on cash payments. Otherwise, the opportunity cost variable might have been overlooked by this model14.
• As for the interest rate on less than 3-month deposits in local currency and real money demand, a positive relationship is found between the interest rate as a channel of the monetary policy transmission mechanism in Egypt and money demand. Accordingly, a 1 percent increase in the interest rate causes real money demand to increase by 1.43 unit, according to the ECM15 model results (using Johansen technique). However, in the light of the (EG) results, the interest rate does not show such significance. To explain, the ECM model is possibly more accurate than the (EG) model in capturing the relationships between variables when the number of explanatory variables exceeds two.
• Turning to the exchange rate variable, the application of the (EG) model reveals the strength of the short- and long-run relationships of the exchange rate as an explanatory variable of money demand. The money demand elasticity ranges between 17 percent and 50 percent, depending on maturity. However, it does not manifest the same significance under the ECM model when applying the Johansen technique, as the results indicate the statistical insignificance of the exchange rate as an explanatory variable for money
14 Subramanian S. S. (1999), “Demand for M2 in an Emerging-Market Economy: An Error-
Correction Model for Malaysia”, pp. 28-29. 15 The inverse logarithm was used, since the interest rate is not an indicator of demand
elasticity.
- 16 -
demand. However, the results of the two models are not contradictory, because the (EG) model - as mentioned earlier - measures the co-integration relationship in one direction only, while the ECM model (using Johansen technique) measures the effect of interaction among all variables. Thus, the analysis of the results shows a strong and statistically significant relationship between the exchange rate in Egypt and the rate of return on TBs, explained by the involvement of foreign investors, as statistics indicate that 25 percent16 of the total outstanding TB balances of the Egyptian government had been held by foreigners before the intensification of the pass-through effects of the global financial crisis in September 2008.
• As for the relationship between the rate of return on TBs and real money demand, which is accepted at a significant level of 90 percent, it is worth mentioning that this variable is the short-term policy rate during the period 1996-200517, specifically because the issuance of TBs was made by the CBE in agreement with the government in order to sterilize cash inflows. Furthermore, the rate of return on TBs is considered the major tool that reflects the propensity for local assets as mentioned above.
• The error correction coefficient (λ) restores equilibrium to the model on the long-run, as the results of the ECM model (by the application of both the Johansen technique and the Engel-Granger two step method) provides evidence that it is statistically significant. Moreover, the coefficient carries a negative sign; in the sense that it corrects error every period (quarterly), i.e. the model takes 1.8 year using Engel-Granger method and 4.8 years with Johansen technique.
• The results highlight the possibility of targeting monetary aggregates as an intermediate objective of the monetary policy before switching to the methodology of inflation-targeting, once its prerequisites are met.
16 The CBE’s “Monthly Statistical Bulletin”, various issues. 17 Ibid.
- 17 - References First: Arabic References
1) The CBE’s “Monthly Statistical Bulletin”, various volumes.
2) El Adly, Ben Abed (2007), “Determinants of Demand on the Imports of the Kingdom of Saudi Arabia within the Framework of Co-integration and Error Correction”, magazine of Saleh Kamel Islamic Economy Center, Al Azhar University.
3) Arab Monetary Fund (1997), “Macroeconomic Analysis and Policies: Empirical case of Egypt”, IMF, Washington D.C., the USA.
Second: Foreign References
4) Al-Mashat, R., and Billmeier, A. (2007), “The Monetary Transmission Mechanism in Egypt” IMF WP/07/285.
5) Nelson & Plosser (1982), “Trends and Random Walk in Macroeconomic Time Series”, Journal of Monetary Economics.
6) Pindyck, Robert (1991), “Econometric Models & Economic Forecasts”, McGraw-Hill, Inc. New York.
7) Rubinfield, D.L. (1991), “Econometric models & Economic Forecast” MaGraw-Hill, Inc, New York.
8) Seddighi, H.R. (2000), “Econometrics: A Practical Approach”, Routledge, London and New York.
9) Subramanian S. S. (1999) “Demand for M2 in an Emerging-Market Economy: An Error-Correction Model for Malaysia”, International Monetary Fund working paper No.173, Washington D.C.
10) Subramanian, S.S. (2001), “Survey of Recent Empirical Money Demand Studies” IMF Staff Paper.
11) Wojciech, W., & others, (1997). “New Direction in Econometric Practice General to Specific Modeling, Cointegration and Vector Autoregression”, Edward Elgar, U.K.
- 18 -
Annex
LM2 = - 2.50 + 0.647*LGDP + 0.002*INT - 0.007*TB - 0.49*LEX + 0.0956*DUM_MP+ 0.045*DUM_SE (8) Dependent Variable: LM2 Sample: 1991:4 2009:2 Included observations: 71 Variable Coefficient Std. Error t-Statistic Prob. LGDP 0.647302 0.064707 10.00359 0.0000 LEX -0.489968 0.043611 -11.23501 0.0000 TB -0.007232 0.004218 -1.714719 0.0912 DUM_MP 0.095672 0.024816 3.855319 0.0003 DUM_SE -0.044725 0.015090 -2.963925 0.0043 INT 0.002351 0.006441 0.364994 0.7163 C -2.504399 0.282572 -8.862863 0.0000 R-squared 0.975905 Mean dependent var 1.046584 Adjusted R-squared 0.973646 S.D. dependent var 0.321027 S.E. of regression 0.052115 Akaike info criterion -2.977329 Sum squared resid 0.173824 Schwarz criterion -2.754248 Log likelihood 112.6952 F-statistic 432.0225 Durbin-Watson stat 1.368838 Prob(F-statistic) 0.000000
-0.4
0.0
0.4
0.8
1.2
1.6
2006 2007 2008 2009
CUSUM of Squares 5% Significance
-12
-8
-4
0
4
8
12
2006 2007 2008 2009
CUSUM 5% Significance
- 19 - D(ECM) = -0.669*ECML(-1) - 0.0047*D(ECM(-1))
ADF Test Statistic -4.654190 1% Critical Value* -2.5963 5% Critical Value -1.9451 10% Critical Value -1.6182 *MacKinnon critical values for rejection of hypothesis of a unit root. Augmented Dickey-Fuller Test Equation Dependent Variable: D(ECM) Method: Least Squares Date: 06/10/10 Time: 14:19 Sample(adjusted): 1992:2 2009:2 Included observations: 69 after adjusting endpoints Variable Coefficient Std. Error t-Statistic Prob. ECM(-1) -0.668940 0.143729 -4.654190 0.0000 D(ECM(-1)) -0.047523 0.122678 -0.387382 0.6997 R-squared 0.358397 Mean dependent var 0.000559 Adjusted R-squared 0.348821 S.D. dependent var 0.059013 S.E. of regression 0.047621 Akaike info criterion -3.222537 Sum squared resid 0.151939 Schwarz criterion -3.157781 Log likelihood 113.1775 Durbin-Watson stat 1.855623
tt ECMLEXLGDPLM ελααα +−+∆+−∆=∆ + )1()1(2 210 Dependent Variable: DLM2 Method: Least Squares Date: 06/10/10 Time: 13:20 Sample(adjusted): 1992:2 2009:2
-30
-20
-10
0
10
20
30
94 96 98 00 02 04 06 08
CUSUM 5% Significance
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
94 96 98 00 02 04 06 08
CUSUM of Squares 5% Significance
- 20 - Included observations: 69 after adjusting endpoints Variable Coefficient Std. Error t-Statistic Prob. DLGDP(-1) -0.084240 0.037816 -2.227659 0.0294 DLEX -0.166614 0.081306 -2.049226 0.0445 ECM(-1) -0.138700 0.057300 -2.420586 0.0183 C 0.012581 0.002735 4.599954 0.0000 R-squared 0.133779 Mean dependent var 0.012738 Adjusted R-squared 0.093799 S.D. dependent var 0.023148 S.E. of regression 0.022036 Akaike info criterion -4.736065 Sum squared resid 0.031563 Schwarz criterion -4.606551 Log likelihood 167.3942 F-statistic 3.346184 Durbin-Watson stat 1.744083 Prob(F-statistic) 0.024359
Date: 11/28/10 Time: 11:24 Sample(adjusted): 1993:1 2009:2 Included observations: 66 after adjusting endpoints Trend assumption: Linear deterministic trend Series: LM2 LGDP LEX TB INT
- 21 - Lags interval (in first differences): 1 to 4 Unrestricted Cointegration Rank Test Hypothesized Trace 5 Percent 1 Percent No. of CE(s) Eigenvalue Statistic Critical Value Critical Value None ** 0.470462 96.72496 68.52 76.07 At most 1 ** 0.372517 54.76540 47.21 54.46 At most 2 0.217272 24.00681 29.68 35.65 At most 3 0.111329 7.838775 15.41 20.04 At most 4 0.000741 0.048943 3.76 6.65 *(**) denotes rejection of the hypothesis at the 5%(1%) level Trace test indicates 2 cointegrating equation(s) at both 5% and 1% levels Hypothesized Max-Eigen 5 Percent 1 Percent No. of CE(s) Eigenvalue Statistic Critical Value Critical Value None ** 0.470462 41.95956 33.46 38.77 At most 1 * 0.372517 30.75859 27.07 32.24 At most 2 0.217272 16.16803 20.97 25.52 At most 3 0.111329 7.789831 14.07 18.63 At most 4 0.000741 0.048943 3.76 6.65 *(**) denotes rejection of the hypothesis at the 5%(1%) level Max-eigenvalue test indicates 2 cointegrating equation(s) at the 5% level Max-eigenvalue test indicates 1 cointegrating equation(s) at the 1% level
- 22 - Abstract
A stable demand for money function is an important factor in formulating a sound and effective monetary policy. This paper estimates the determinates of the demand for money function in Egypt during (Dec. 1991/June 2009). To this end, the paper uses Engel-Granger (EG) two step method and the Error Correction Model (ECM), and finds that the explanatory variables [gross domestic product (GDP), interest rate (INT), yield on 90 day treasury bills (TB) and the exchange rate of the Egyptian pound against dollar (EX)] have statistical significance. Then, using the CUSUM and CUSUMSQ tests, the paper examines the stability of short- and long-term relationships between real demand for money and the explanatory variables. The ECM shows that the real demand for money in Egypt corrects its imbalance every quarter by 5% and reaches equilibrium after 4.8 years. EG, on the other hand, unfolds that the above said demand corrects its imbalance by 14% after 1.8 year. The paper concludes that the exchange rate as a channel for the transmission mechanism is a very effective instrument. Finally, the paper emphasizes that the monetary policy in Egypt can be drawn on the basis of monetary aggregates till the prerquisites of inflation targeting are met.
- 23 -
1 - Macroeconomic Performance
According to the data of the Ministry of Planning, real GDP growth at factor cost noticeably declined to 1.9 percent in FY 2010/2011, from 5.1 percent in FY 2009/2010. The decline was largely a result of the weak performance of all economic sectors in general, in the wake of the events of the January 25th Revolution that disrupted most of the economic activities. This caused a negative growth of 3.8 percent at factor cost, and 4.2 percent at constant market prices (y/y) in Q3 (January/March 2011). However, in Q4 (April/June), the economy managed to make up for part of its losses. In figures, the GDP growth mounted to a positive 0.3 percent at factor cost, and 0.4 percent at constant market prices (annual basis). 1/1- GDP (at factor cost and 2006/2007 prices)
On the supply side, domestic demand-driven sectors made a lower
contribution of 89.5 percent to GDP growth (against 90.2 percent a year earlier). The underperformance was most pronounced in manufacturing (adding -0.1 point against 0.8 point), construction and building (0.2 point against 0.7 point), wholesale and retail trade (0.2 point against 0.6 point), and finance (nil against 0.3 point), and was less pronounced in agriculture and irrigation (0.4 point against 0.5 point), communications and information (0.3 point against 0.5 point), and the general government (0.3 point against 0.4 point).
- 24 -
Real GDP Growth by Main Economic Sectors at Factor Cost
(percentage point) 2010/2011 2009/2010
Sector
Growth Rate (%)
Share in Real GDP Growth
(1.9 point)
Growth Rate (%)
Share in Real GDP Growth
(5.1 point) Domestic Demand-Driven Sectors
Agriculture, irrigation and fishing
2.7 0.4 3.5 0.5
Manufacturing -0.9 -0.1 5.1 0.8 Electricity 4.5 0.1 6.3 0.1 Construction and building
3.7 0.2 13.2 0.7
Transportation and storage
2.0 0.1 6.8 0.3
Communications 6.7 0.3 13.3 0.5 Wholesale trade 1.6 0.2 6.1 0.6 Finance 1.6 0.0 5.2 0.3 General Government
3.7 0.3 4.2 0.4
Other Sectors∗ 0.2 0.4 Total 1.7 4.6
External Demand-Driven Sectors
Extractions 0.6 0.1 0.9 0.1 Suez Canal 11.5 0.3 -2.9 -0.1 Tourism -5.9 -0.2 12.0 0.5 Total 0.2 0.5 * Including water, sanitation, information, insurance, social insurance, real estates and
social services.
External demand-driven sectors also underperformed; particularly tourism whose contribution to GDP growth fell from 0.5 point in the previous FY to a negative 0.2 point in the reporting year. However, the effect of such a fall was mitigated by the higher contribution of Suez Canal (0.3 point against a negative 0.1 point). The contribution of extractions remained stable at 0.1 point.
- 25 -
Notably, the improvement in GDP growth in Q4 (0.3 percent) relative to the -3.8 percent in Q3 was explained by the reversal from negative to positive contributions of wholesale and retail trade, transportation and storage, finance, public services, and construction and building. Moreover, the negative contribution of manufacturing inched down from 1.8 point to only 0.7 point, and that of tourism from -1.4 point to - 0.8 point.
Growth Rates during Q3 and Q4 of FY 2010/2011(Annual Basis)
2.5
-0.6-3.8
2.3 2.2 2.2 0.33.4 2.3 3.3
12.7
2.1 1.7 1.6 2.9
-19.5
2.8 3.2 2.1
-35-30-25-20-15-10
-505
101520
Agr
icul
ture
, For
ests
& F
ishi
ng
Ext
ract
ions
Man
ufac
turi
ng
Ele
ctri
city
Wat
er
San
itatio
n
Con
stru
ctio
n &
Bui
ldin
gs
Tran
spor
tatio
n &
Sto
rage
Com
mun
icat
ions
Info
rmat
ion
Sue
z C
anal
Who
lesa
le &
Ret
ail T
rade
Fina
nce
Insu
ranc
e
Soc
ial S
olid
arity
Tour
ism
Rea
l Est
ate
Gen
eral
Gov
ernm
ent
Soc
ial S
ervi
ces
%
Q4 (0.3%) Q 3 (-3.8%)
-26- Comparing the potential growth rate∗ in Q4 (4.1 percent) with the actual growth
rate of 0.3 percent (seasonally adjusted) shows that the Egyptian economy continued to be in a contractionary business cycle, causing the output to achieve a negative gap of 3.8 percent. However, when comparing the fourth quarter's performance, with that of the third quarter, it was found that the economy showed a gradual improvement as it managed to narrow its negative output gap (estimated at 7.9 percent) in Q3.
Applying the prior methodology to the different economic sectors shows that the
business cycle of most sectors continued its downward trend. Though mostly in recession, yet some of them, particularly tourism, construction and building, transportation and storage and wholesale and retail trade began to relatively improve. In Q4, the output gap of these sectors showed lower negative rates as compared with the previous quarter (see the following table). Suez Canal was the only sector that continued to achieve economic expansion, as its surplus rose to 8.8 (from 8.1 percent in Q3).
∗ The trend component was calculated by using the quarterly data of both GDP and a set of economic sectors during the
period 2001/02 -2010/11. This was made by applying the approach of Hodrick-Prescott Filter, then deriving the cyclical component which reflects the output gap.
Real GDP Growth Rate Divided into GDP Trend and GDP Gap (Annual Basis)
-7.9
-3.8
0.3
-3.7
4.1
-10.0-8.0
-6.0-4.0
-2.00.02.0
4.06.0
8.010.0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
%
GDP Gap - Business CycleGDP Growth Rate - Seasonally AdjustedPotential GDP-Trend
- 27 -
Actual Growth Rates (Seasonally Adjusted)
The Output Gap of Main Economic Sectors (%)
Output Gap Economic Business Cycle
Actual Growth Rate (%)
Q3 2010/11
Q4 2010/11
Q3 2010/11
Q4 2010/11
-6.5 -7.4 3.4 2.2 Communications -19.0 -8.7 -9.8 0.3 Construction and building -5.2 -2.5 -0.2 2.4 Electricity -5.8 -3.8 -2.8 -0.9 Extractions -9.4 -2.7 -5.0 1.6 Finance -1.2 -0.8 2.6 3 General government
-34.1 -22.2 -29.4 -17.7 Tourism -13.9 -7.2 -10.6 -3.9 Manufacturing -2.3 -0.8 1.4 2.9 Real estate 8.1 8.8 11.0 11.8 Suez Canal
-12.9 -2.0 -8.7 2.1 Wholesale and retail trade -14.1 -1.7 -9.0 3.4 Transportation and storage
Source: Based on the Ministry of Planning data.
In 2010/2011, the public and private sectors added 1.9 percent to economic growth. Contribution of the former remained broadly at the same level of 2009/2010 (1.1 point), while the latter added only 0.8 point (against 4.0 points). The decline in the share of the private sector mainly took place in the third quarter (-4.4 points - annual basis) and was most pronounced in manufacturing; tourism; wholesale and retail trade; construction and building; transportation and storage; and finance.
- 28 -
Contribution of The Private Sector to Real GDP Growth(at Factor Cost)
0.36
0.05
0.17
0.05
0.20
0.00
0.10
0.10
-0.30
0.16
-0.14
-0.40 -0.20 0.00 0.20 0.40 0.60 0.80
Agriculture, Irrigation & Fishing
Extractions
Manufacturing
Construction & Building
Transportation & Storage
Communications
Wholesale & Retail Trade
Finance
Tourism
Real Estate
Social Services
Fiscal Year 2010/2011 (0.8 percetange point)Fiscal Year 2009/2010 (4.0 percetange point)
Contribution of The Public Sector to Real GDP Growth(at Factor Cost)
0.03
-0.010.08
0.02
0.02
0.030.07
0.35
0.01
0.040.01
0.15
0.32
-0.20 -0.10 0.00 0.10 0.20 0.30 0.40
Extractions Manufacturing
ElectricityWater
Construction & BuildingTransportation & Storage
CommunicationsSuez Canal
Wholesale & Retail TradeFinance
InsuranceSocial Solidarity
General Government
Fiscal Year 2010/2011 (1.1 percetange point)Fiscal Year 2009/2010 (1.1 percetange point)
- 29 - 1/2- GDP by Expenditure (at 2006/2007 market prices)
On the demand side, the slowdown in economic growth was primarily ascribed to the lower share of capital formation (including the change in stock) that registered a negative 0.8 point (against a positive 1.6 point). Another factor at work was the decline in the share of net external demand (exports of goods and services minus imports of goods and services) that shifted from a positive 0.1 point to a negative 1.4 point. However, the rise in the share of private consumption (3.6 points against 2.9 points) made up for the weak contributions of the above items. Against this background, domestic saving retreated by 12.6 percent in FY 2010/2011.
Growth Rates of Demand Components and their Share in Real GDP Growth
(at market prices)
Share in GDP Growth (percentage point)
Growth Rates (%)
2010/11 2009/10 2010/11 2009/10
1.8 5.1 1.8 5.1 1- GDP at constant market prices 3.1 5.0 3.1 4.9 2- Domestic Demand 4.0 3.4 4.9 4.2 A- Final Consumption 3.6 2.9 5.0 4.1 Private 0.4 0.5 3.8 4.5 Public
-0.8 1.6 -4.4 8.0 B- Capital Formation (Including Change in the Stock)
-1.4 0.1 -60.3 -5.2 3- Net External Demand
Shares of Demand Components in Real GDP Growth
4.03.4
-1.4
0.1
-0.8
1.6
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
2010/20112009/2010
Net ExportsInvestmentConsumption
(Per
cent
age
poin
t)
- 30 -
Implemented investments (at 2006/2007 prices) amounted to LE 162.9 billion,
registering a decline of 5.6 percent in the reporting year compared with a 7.7 percent increase a year earlier. The slowed investments were mainly attributed to the lower contribution of the private sector (5.0 points against 16.5 points) especially of oil and gas; other services; and transportation and storage. In addition, the negative contribution of the public sector aggravated (-10.6 points against -8.8 points). The decline in investment growth was particularly marked in the sectors of transportation and storage; and other manufacturing industries. However, the contribution of communications and real estates to investment growth increased.
Contribution of the Public Sector to the Real Growth of Investment
-0.150.01
-0.13
-1.09
-0.77
-2.090.84
0.100.090.000.17
-0.69-0.42-0.50
-0.94-4.99
-0.06
-0.03
-0.02
0.12
-15 -14 -13 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10
Agriculture Crude Oil
Natural Gas Oil Refining
Other ManufacturingElectricity
Water Construction & Building Transportation & Storage
Communications Suez Canal
Wholesale & Retail TradeFinancial Intermediaries
Tourism Real Estate
Educational Services Health Services
SanitationOther Services
Others *
Fiscal Year 2010/2011 (-10.6 percentage points)Fiscal Year 2009/2010 (-8.8 percentage points) * Includes price differences & settlements
- 31 -
The breakdown of implemented investments by economic sector ran as follows:
16.4 percent in extractions, 10.8 percent in manufacturing, 7.4 percent in electricity, 3.0 percent in water, 2.7 percent in agriculture, 2.5 percent in construction and building, 27.8 percent in productive sectors and 29.4 percent in social services.
1/3 - Cotton
Hereunder are the main developments witnessed in the cotton crop for the 2010/2011 season on the sides of supply and demand: Production
According to the estimates of the Cotton and Textile Industries Holding Company, cotton cultivated area reached about 374.8 thousand feddans, up by 30.2 percent compared to the final figures of the previous season. The area cultivated with long-staple varieties constituted about 81.3 percent of the total, whereas extra-long staples constituted 18.7 percent (though the area of extra-long staples doubled, its percentage to the total cultivated area remained scanty).
-0.20-7.91
-3.380.28
0.030.000.00
0.64-0.50
0.140.00
1.710.00
0.475.91
0.400.39
0.00
8.23-1.20
-14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0
Agriculture Crude Oil
Natural Gas Oil Refining
Other ManufacturingElectricity
Water Construction & Building Transportation & Storage
Communications & InformationSuez Canal
Wholesale & Retail TradeFinancial Intermediaries
Tourism Real Estate
Educational Services Health Services
SanitationOther Services
Others*
Fiscal Year 2010/2011 ( 5.0 percentage points)Fiscal Year 2009/2010 (16.5 percentage points)
Contribution of the Private Sector to the Real Growth of Investment
* Includes price differences & settlements
- 32 -
Area and Production of Cotton Varieties
Area (Thousand Feddans)
Change Production (Thousand Metric Cantars)
Change Average Productivity
Cantars/Feddan 2009/10 2010/11 + (-) 2009/10 2010/11 + (-) 2009
/10 2010 /11
Final Estimate (%) Final Estimate (%) Total: 287.9 100.0 374.8 100.0 30.2 1890.6 100.0 2614.6 100.0 38.3 6.6 7.0 Extra-long staples 34.8 12.1 70.0 18.7 101.2 257.1 13.6 555.9 21.3 116.2 7.4 7.9 Long staples 253.1 87.9 304.8 81.3 20.4 1633.5 86.4 2058.7 78.7 26.0 6.5 6.8 Source: The Cotton and Textile Industries Holding Company. Cotton output totaled about 2.6 million metric cantars in the 2010/2011 season, up by 38.3 percent above the level of the previous season. The major part of the rise was in the extra-long staple output which mounted by 116.2 percent, to register 0.6 million metric cantars, against 0.3 million metric cantars in the preceding season. Moreover, the average productivity per feddan upped to 7 from 6.6 cantars/feddan. Stock, Total Supply and Domestic Consumption
During the season in question, total cotton supply amounted to about 2.8 million
metric cantars, with a pickup of 22.1 percent compared with the previous season. The rise was attributed to the higher output of long and medium long staple varieties that reached 2.1 million metric cantars, up by 26 percent. Moreover, extra-long staple varieties surged by 116.2% to 0.6 million metric cantars (against 0.3 million metric cantars).
Total Supply and Uses (Thousand Metric Cantars)
Season 2009/2010 Final
2010/2011 Estimated
Change + (-) %
Total Supply 2326.5 2840.2 22.1 Opening stock 435.9 225.6 (48.3) Output (Crop) 1890.6 2614.6 38.3 Total Uses 2115.2 2859.0 35.2 Domestic Consumption 555.6 645.8 16.2 Export Commitments* 1559.6 2213.2 41.9 Source: Ibid. * Up to the end of the season.
- 33 -
Domestic consumption grew by nearly 16.2 percent, as the amount of raw cotton supplied to local mills in 2010/2011 mounted to 0.65 million metric cantars, against 0.56 million metric cantars in the previous season. On the other hand, export commitments in the season rose by 41.9 percent, to 2.2 million metric cantars (against 1.6 million metric cantars in the preceding season). Export Commitments*
According to the Cotton and Textile Industries Holding Company, total export
commitments, since the beginning of the season up to end of June 2011, reached 2.2 million metric cantars (against about 1.5 million metric cantars at the end of June 2010). Those commitments consisted of 572.1 thousand metric cantars of extra-long staple varieties (25.9 percent), and 1638.6 thousand metric cantars of long staple varieties (74.1 percent).
The private sector companies accounted for the bulk of total commitments (81
percent), while the public sector provided the remaining 19 percent.
* Up to the end of June.
Egyptian Cotton Position
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Opening Stock Crop Domestic Consumption Export Commitments
Mill
ion
Met
ric C
anta
rs
2009/2010 2010/2011
- 34 -
Export Commitments (Preliminary) by Variety and Exporting Companies
(Thousand Metric Cantars)
Season 2009/2010
(1/9/2009 - 30/6/2010) 2010/2011
(1/9/2010 - 30/6/2011) 1-Variety Extra-long staples 434.7 572.1 Long staples 1071.6 1638.6 Total 1506.3 2210.7 2-Exporting Companies Public business sector companies 189.5 423.5 Private sector companies 1316.8 1787.2 Total 1506.3 2210.7 As for export commitments by importer, the Asian countries (mainly India, China and Pakistan) came in the forefront, accounting for 61.7 percent of the total. The other European countries (mainly Switzerland and Turkey) came second with 14.3 percent, followed by the EU countries (particularly Germany and Italy) with 7.3 percent of the total, and the USA whose commitments amounted to 53 thousand metric cantars or 2.4 percent of the total. The Arab countries, headed by Qatar, made commitments of 101 thousand metric cantars or 4.6 percent of the total.
Export Commitments by Importer (%)
As of the Beginning of the Season (Up to End of June) 2008/2009 2009/2010 2010/2011
Total (million metric cantars) 397.2 1506.3 2210.7 Asian countries; of which 49.6 77.3 61.7 India 11.8 36.3 25.2 Pakistan 2.5 12.6 9.4 China 23.9 21.9 19.1 EU countries; of which 4.3 4.3 7.3 Italy 2.8 2.8 2.8 Germany 00 0.9 3.8 Other European countries; of which 14.8 10.6 14.3 Switzerland 0.5 4.6 9.5 Turkey 14.3 6.0 4.8 USA - - 2.4 Arab countries 28.5 2.8 4.6 Qatar 27.0 1.7 3.0
Others 2.8 5.0 9.7 Source: Ibid.
-35 –
International Developments
According to the estimates of the International Cotton Advisory Committee (ICAC) for the 2010/2011 season, compared with the preceding season, the opening stock of raw cotton contracted by 27.2 percent to 39.9 million bales, while world cotton production increased by 11.9 percent. Consequently, total world supply of cotton declined by 1.9 percent to 152.2 million bales. In addition, the ICAC forecasted a drop of 0.1 percent in world consumption, to 114.1 million bales. Hence, the carryover at the end of the season is expected to decrease by 7.1 percent to 38.1 million bales.
Position of World Cotton (Million Bales*)
Season 2009/2010 2010/2011 Final Estimate
Change + (-) %
Opening stock 54.8 39.9 (27.2) World production 100.4 112.3 11.9 Total Supply 155.1 152.2 (1.9) World consumption 114.2 114.1 (0.1) Carryover at the end of the season 41.0 38.1 (7.1) Source: The Egyptian Cotton Gazette. * World bale = 4.6 cantars.
Export Commitments 2009/2010 Season (%)
Asian Countries
77.3
EU Countries4.3
Other European Countries
10.6
Others5.0
Arab Countries
2.8
Export Commitments 2010/2011 Season (%)
United States2.4
EU Countries7.3
Other European Countries
14.3
Others9.7
Arab Countries
4.6
Asian Countries
61.7
- 36 - 1/4 - Suez Canal
Suez Canal receipts increased by 11.9 percent, to record US$ 5.1 billion (against
US$ 4.5 billion). The increase was mainly attributed to the rise in net tonnage and in the number of transiting ships by 13.9 percent and 3.1 percent, in order.
رسم بياني
Noticeably, Suez Canal activities were not influenced by the repercussions of the
recent events in Egypt and the Arab region. Data analysis of the second half of FY 2010/2011 (January-June 2011) compared with the same period a year earlier showed that Suez Canal receipts mounted by 12.9 percent to US$ 2.5 billion (against US$ 2.3 billion) and net tonnage by 12.7 percent to 450.2 million tons (against 399.6 million tons).
5.14.75.2
4.24.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2006/2007 2007/2008 2008/2009 2009/2010 2010/2011
Suez Canal revenues
Suez Canal RevenuesFYUS$ bn
Total Tonnage (Net)
191.9 195.9 192.6
207
223 223.7217.9
232.3
0
50
100
150
200
250
Q1 Q2 Q3 Q4
(million tons)
2009/2010 2010/2011
- 37 -
Suez Canal Receipts
1106.8
1155.2
1104.1
1150.7
1254.1 1253.7
1315.5
1229.6
1000
1050
1100
1150
1200
1250
1300
1350
Q1 Q2 Q3 Q4
(US$mn)
2009/2010 2010/2011
Transiting ships rose by 546 in number, to register around 18.1 thousand in FY
2010/2011, due to the pickup in the number of transiting ships (other than oil tankers) by 418, to register 14.5 thousand ships or 80.2 percent of the total, and the number of oil tankers by 128 to 3.6 thousands.
Traffic in Suez Canal
2009/2010 2010/2011 Change % Total Number of Ships 17504 18050 3.1 Oil tankers 3438 3566 3.7 Others 14066 14484 3.0 Total Net Tonnage (Million Tons)
787.4
896.9
13.9
Oil tankers 110.9 112.7 1.6 Others 676.5 784.2 15.9
The volume of cargo transiting the Suez Canal increased by 55.4 million tons or 9.1 percent, reaching 667.1 million tons (against 611.7 million tons in the previous FY). The increase stemmed mainly from the rise in the northbound cargo by 49.6 million tons or 16.6 percent (mainly petroleum products), and southbound cargo by 5.8 million tons or 1.8 percent.
- 38 -
Traffic in Suez Canal
2008/2009 2009/2010 2010/2011 Oil Tankers Number 3772 3438 3566 Net tonnage Million tons 128.6 110.9 112.7 Average tonnage
Thousand tons 34.1 32.3 31.6
Other Ships Number 15582 14066 14484 Net tonnage Million tons 682.8 676.5 784.2 Average tonnage
Thousand tons 43.8 48.1 54.1
Total Number 19354 17504 18050 Net tonnage Million tons 811.4 787.4 896.9 Average tonnage Thousand tons 41.9 45.0 49.7
Transiting Cargo by Destination
(million tons) 2008/2009 2009/2010 2010/2011
Total 625.3 611.7 667.1 Southbound: 297.3 313.8 319.6 Petroleum products 41.7 42.1 39.3 Cereals 32.1 25.6 15.7 Mineral fertilizers 15.3 12.5 10.3 Fabricated metals 20.6 22.0 16.9 Others 187.6 211.6 237.4 Northbound: 328.0 297.9 347.5 Petroleum products 75.1 48.8 56.7 Ores and metals 16.2 6.9 3.2 Cereals 0.4 0.5 0.4 Oil seeds 1.2 0.7 0.9 Others 235.1 241.0 286.3 1/5- Employment and Unemployment
According to the Labor Force Survey Report, released by CAPMAS, all
indicators were relatively stable during Q4 (April/June) of FY 2010/2011 as compared with the previous quarter (January/March 2011). The annual growth rate of the labor force posted 0.5 percent at end of June 2011, compared with 0.6 percent at end of March. Unemployment rate registered 11.8 percent at end of June (against 11.9
- 39 - percent at end of March). The number of unemployed persons accelerated by around 760 thousand or 32.4 percent in FY 2010/2011. Such an acceleration was an outcome of the increase in jobless males by 779 thousands and the decrease in the number of jobless females by 19 thousand. The pickup in unemployment rate came on the back of the events of the revolution, and the consequent slowdown in production. In addition, some of the existing enterprises (especially of manufacturing) tended to lay off a large number of their employees. Add to this the return of around 270 thousand Egyptian workers from Libya.
Source: Labor Force Survey Report, CAPMAS.
9.36% 9.40% 9.12% 8.96% 8.94% 8.90%
11.90% 11.80%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Unemployment Labor Force Employment2009/2010 2010/2011
Labor Force & Employment Indicators(on an annual basis)
- 40 - 1/6- Tourism
According to the statistics of the Ministry of Tourism, the number of arrivals
noticeably decreased by 1.8 million or 13.3 percent compared with the preceding year, recording about 11.9 million tourists (against 13.8 million tourists). The number of tourist nights by departure dropped as well by 8.7 percent to 124.6 million (against 136.4 million nights). However, the average stay per tourist during the year mounted to 10.4 nights (against 9.9 nights).
The above downturn was partly brought about by the sharp drop of 40.4 percent in the number of tourists during the second half of the year (January-June 2011) to about 4.1 million tourists (compared with 6.9 million tourists in the corresponding half of FY 2009/2010). Another affecting factor was the fall of 34.7 percent in the number of tourist nights by departure to some 42.9 million (against 65.7 million nights). The slowdown of tourism activity was traced to the repercussions of the Revolution, as evidenced by the monthly declines registered in the period of February - June 2011∗ (80.0 percent, 60 percent, 35.7 percent, 40.8 percent and 28.9 percent, respectively, compared with the same months of 2010). Concurrently, tourist nights manifested the same downtrend in the same months, from February to June 2011 (monthly declines of 53.3 percent, 64.8 percent, 44.7 percent, 33.9 percent and 26.3 percent, in order).
∗ Social and Economic Development plan for FY 2010/2011.
Number of Tourists during Fiscal Year
7.8
4.1
11.913.8
6.96.8
0.02.04.06.08.0
10.012.014.016.0
July/Dec. Jan./June Fiscal Year
mn
2009/20102010/2011
- 41 - The relatively good performance of tourism activity during the first half of the
year offset the underperformance in the second half (January-June 2011). To explain, tourism revenues reached US$ 6.9 billion during the first half (July-December 2010), against US$ 3.6 billion in the second half (January-June 2011). As a consequence, tourism revenues decreased during the year by 8.6 percent to US$ 10.59 billion (against US$ 11.59 billion in the preceding FY), representing 4.5 percent of GDP (at current market prices) against 5.3 percent in the year of comparison; as the average spending per tourist a night remained at the same level of the previous FY (US$ 85 per night). The ratio of tourism revenues to current receipts (including transfers) declined to 17.1 percent from 20.0 percent.
Investments in the tourism sector amounted to some LE 6.2 billion during FY
2010/2011 (against LE 4.4 billion in the preceding year), constituting 2.7 percent of total investments implemented during the year (against 1.9 percent). The private sector implemented about LE 5.8 billion or 94.0 percent of the investments.
Number of Tourist Nights during Fiscal Year
136.4
81.7
42.9
124.6
70.7 65.7
0.020.040.060.080.0
100.0120.0140.0160.0
July/Dec. Jan./June Fiscal Year
mn
2009/2010
2010/2011
Tourism Revenues during Fiscal Year
0.02.04.06.08.0
10.012.0
$bn
2009/2010 6.0 5.6 11.6
2010/2011 6.9 3.7 10.6
July/Dec. Jan./June Fiscal Year
- 42 -
Tourism Indicators
2009/2010 2010/2011 Change + (-) %
Number of arrivals (000s) 13758 11931 -13.3 Number of departures (000s) 136370 124572 -8.7 Average spending per tourist a night (US$) 85.0 85.0 0.0 Tourism revenues (US$ billion) 11.591 10.589 -8.6 Current receipts including transfers (US$ mn) 57899 62002 7.1 Average tourist stay (night) 9.91 10.44 5.3 GDP at current prices (LE billion) 1206.6 1371.8 13.7 GDP at current prices (US$ billion) 218.4 235.6 7.9 Average exchange rate during the year 5.524 5.822 5.4 Source: CBE, Ministry of Tourism & Ministry of Planning and International Cooperation.
1- Number of Arrivals:
The European group remained in the forefront, with a relative weight of 73.7 percent of total tourist flows during FY 2010/2011, against 75.9 percent in the previous FY. However, the number of arrivals therefrom retreated by 1.6 million or 15.8 percent, representing around 90.2 percent of the total decline in the number of arrivals. The sharp fall in European tourists was attributed to the cancellation of most reservations during the Revolution and in its aftermath.
The rise in the number of arrivals from the African and Middle East groups
(by 4.3 percent and 0.1 percent, respectively) made up for the aforementioned slowdown, as their relative weights went up compared with the previous FY. On the other hand, the relative weight of the Asian and Pacific group maintained the same level of the year of comparison (4.7 percent), thus recording the least decline in tourist flows (14.1 percent) relative to the other groups. The relative weight of the Americas group fell to 3.7 percent from 3.9 percent, with a 17.9 percent drop in the number of arrivals therefrom.
Geographical Distribution of Tourism
- 43 -
Number of Tourists
2009/2010 2010/2011
No. (000s)
Relative Weight
No. (000s)
Relative Weight
Change + (-)
%
Total 13758 100.0 11931 100.0 -1827 -13.3 Europe 10439 75.9 8791 73.7 -1648 -15.8 Middle East 1635 11.9 1636 13.7 1 0.1 Africa 462 3.3 482 4.0 20 4.3 The Americas 531 3.9 436 3.7 -95 -17.9 Asia and the Pacific 652 4.7 560 4.7 -92 -14.1 Others 39 0.3 26 0.2 -13 -33.3 Source: Ministry of Tourism. 2- Tourist Nights by Departure:
The European group ranked first, accounting for 67.4 percent of the total in FY
2010/2011, though the number of nights spent by departures rolled back by 13.7 percent. Ranking second, the Middle East group shared with 19.1 percent of the total, and even registered the highest rise in tourist nights (10.3 percent) compared with the other geographical groups. The African countries followed with a share of 4.7 percent and an increase of 6.9 percent in the number of tourist nights. The Americas group contributed 4.5 percent of total tourist nights, with a decrease of 10.3 percent compared with the previous FY. The tourist nights spent by the Asian and Pacific countries represented 4.1 percent, with a decline of 6.0 percent.
Number of Tourist Nights by Departures
2009/2010 2010/2011
No. (000s)
Relative Weight
No. (000s)
Relative Weight
Change + (-)
%
Total 136370 100.0 124572 100.0 -11798 -8.7 Europe 97305 71.3 83934 67.4 -13371 -13.7 Middle East 21514 15.8 23737 19.1 2223 10.3 Africa 5537 4.1 5920 4.7 383 6.9 The Americas 6219 4.6 5581 4.5 -638 -10.3 Asia and the Pacific 5462 4.0 5136 4.1 -326 -6.0 Others 333 0.2 264 0.2 -69 -20.7 Source: Ibid.
- 44 - The top ten markets exporting tourism to Egypt contributed 63.9 percent of
the total number of visitors (against 65.1 percent), and 62.6 percent of total tourist nights (against 64.5 percent). Obviously, the basic structure of these markets has not shown any substantial change with respect to the exporting countries (in terms of both the number of tourists and tourist nights) in the reporting year relative to the year of comparison, though their order slightly changed.
The Top Ten Markets in Terms of Tourist Arrivals
(Thousand) 2009/2010 2010/2011 Country Number % Number % Russia 2622 19.1 2033 17.0 The United Kingdom 1424 10.3 1294 10.8 Germany 1249 9.1 1109 9.3 Italy 1092 7.9 820 6.9 France 562 4.1 463 3.9 Poland 518 3.8 469 3.9 Libya 420 3.0 505 4.2 Ukraine 376 2.7 351 3.0 Saudi Arabia 358 2.6 305 2.6 UAE 341 2.5 278 2.3 Total 8962 65.1 7627 63.9 General Total 13758 100.0 11931 100.0
The Top Ten Markets in Terms of Tourist Nights
by Departure (Thousand)
2009/2010 2010/2011 Country Number % Number % Russia 22563 16.5 17098 13.7 The United Kingdom 14579 10.7 13483 10.8 Germany 14073 10.3 12873 10.3 Italy 9678 7.1 7570 6.1 Libya 5350 3.9 7294 5.9 France 5309 3.9 4137 3.3 Saudi Arabia 4988 3.7 4550 3.6 USA 4176 3.1 3770 3.0 Poland 3988 2.9 3815 3.1 Sudan 3240 2.4 3445 2.8 Total 87942 64.5 78035 62.6 General Total 136370 100.0 124572 100.0
- 45 -
1/7- Inflation Consumer Price Index (CPI) During FY 2010/2011, the annual headline CPI inflation (urban) accelerated, registering some 11.8 percent in June 2011 (against 10.1 percent in June 2010). The rise was mainly in tobacco and narcotics whose share in headline inflation rose to 1.5 percentage point (against nil), with the increase of its inflation rate to 69.9 percent (against nil). The decision to raise taxes on tobacco (40-50 percent) effective as of the first of July 2010 was behind the price hike in tobacco. The contribution of food and non-alcoholic beverages rose as well to 7.8 percentage points (from 7.1 percentage points), with a relative weight of 39.9 percent of the CPI. Similarly, the share of education upped to 1.1 point (from 0.4 point).
Source: CAPMAS.
The hike in the share of food and non-alcoholic beverages stemmed from the rise
in its inflation to 19.0 percent in the reporting year (against 18.6 percent a year earlier), due to the soaring of world food prices at a rate of 32.9 percent in the year ending June 2011. The intensification of the annual inflation of this group was held back by the noticeable moderation in world food price increases in Q4 of the year.
Annual CPI Inflation and Price Index of Food and Non-Alcoholic Beverages (Urban)
10.1 10.4 10.9 11.0 11.010.2 10.3 10.8 10.7 11.5 12.1 11.8 11.8
0
4
8
12
16
20
24
28
Jun-2010 Jul Aug Sep Oct Nov Dec Jan-2011 Feb Mar Apr May Jun-2011
%
All Items Food and Non-Alcoholic Beverages
- 46 -
Source: IMF.
The pickup in the share of food and non-alcoholic beverages was ascribed to the
higher contributions of most subgroups, namely bread and cereals (1.8 percentage point against 0.3 point); oils and fats (0.6 point against 0.4 point); vegetables (2.3 points against 2.2 points); and fruits (0.6 point against 0.5 point). Conversely, declines were observed in the groups of meat and poultry (1.4 point against 2.3 points) and sugar (0.2 point against 0.3 point). On the other hand, the contribution of miscellaneous goods and services to headline inflation decelerated (from 0.6 to 0.1 percentage point), and so did housing, electricity and fuel (0.2 against 0.6 percentage point), thus curbing the rise in inflation in the reporting year. Another factor that helped to reign in the rise of inflation was the slowdown in real GDP growth rate (at market prices) to 1.8 percent in the reporting year.
Change in International Prices of Basic Foodstuffs
-6.0-4.0-2.00.02.04.06.08.0
10.012.014.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009/2010 2010/2011
%
Contribution of Main Items of Food to Headline Inflation (Annually)
0.00.30.60.91.21.51.82.12.42.7
Meat & Poultry Oils & Fats Fruit Bread & Cereals Vegetables Sugar
Percentage point
FY 2009/2010
FY 2010/2011
- 47 -
The following table illustrates the shares of CPI groups (urban) in headline
inflation during the periods of review and comparison:
Inflation Rate in FY Share in Headline Inflation in FY
(%) (Percentage Point) Main CPI Groups
2009/2010 2010/2011 2009/2010* 2010/2011 General Index 10.1 11.8 10.1 11.8 Food and non-alcoholic beverages 18.6 19.0 7.1 7.8 Alcoholic beverages, tobacco and narcotics 0.0 69.9 0.0 1.5 Clothing and footwear 0.6 2.2 0.0 0.1 Housing, water, electricity, gas & fuel 2.9 1.1 0.6 0.2 Furnishings, household equipment and routine maintenance 3.3 2.5 0.1 0.1 Health care 0.3 1.9 0.0 0.1 Transportation 1.0 1.0 0.1 0.1 Communications -0.2 0.1 0.0 0.0 Culture and recreation 2.9 5.9 0.1 0.2 Education 9.4 24.3 0.4 1.1 Restaurants and hotels 4.5 12.1 0.2 0.5 Miscellaneous goods & services 16.4 2.4 0.6 0.1 ∗ CAPMAS issued a new series of CPIs in August 2010; data of the period of comparison is not available
because of change in the weights of this series.
CPI inflation (urban), on a monthly basis, accelerated to 0.9 percent on average during the reporting year (against 0.7 percent) in the year of comparison. The monthly inflation recorded the highest level throughout July and August 2010 (2.5 percent and 2.9 percent, respectively), on the back of the above decision of raising taxes on tobacco, along with the price hikes of food and non-alcoholic beverages in these two months. Nevertheless, inflation started to recede since September 2010, recording a negative rate in November and December 2010; the lowest level witnessed in the reporting period as a whole (broadly the same level of the corresponding months a year earlier).
- 48 -
Producer Price Index (PPI)
Taking an upward trend similar to the CPI, the annual PPI inflation accelerated to 19.4 percent in FY 2010/2011, against 8.6 percent in the previous FY. The rise in PPI inflation was ascribed above all to the higher contribution of mining and quarrying (7.3 points against 2.0 points), in view of the significant increase in its inflation rate to 36.3 percent from 9.8 percent, particularly due to the higher share of crude oil (11.2 points against 3.0 points). Also, the share of agriculture and fishing inched up to 7.9 points from 3.7 points, mainly because of the larger contribution of cereals and leguminous crops (1.7 point against 0.1 point), fruits (1.4 point against 0.4 point), rice (0.8 point against 0.1 point), and cotton (0.5 point against a negative 0.1 point).
Annual Inflation Rate According to PPI (2004/2005 = 100)
-15.0-10.0-5.00.05.0
10.015.020.025.0
Jun-20
09 Jul
AugSep
OctNov
Dec
Jan-2
010 Feb Mar AprMay
Jun-20
10 Jul
AugSep
OctNov
Dec
Jan-2
011 Feb Mar AprMay
Jun-20
11
%
Monthly Inflation Rate According to CPI (Urban)
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Jun-20
09 Jul
Aug Sep OctNov Dec
Jan-20
10 Feb Mar AprMay
Jun-20
10 Jul
Aug Sep OctNov Dec
Jan-20
11 Feb Mar AprMay
Jun-20
11
%
- 49 - The higher inflation was also brought about by the pickup in the contribution of
the manufacturing group to 3.7 points (against 2.5 points). This was attributed to the rise in the share of the subgroup of iron and steel industry (1.1 point against 0.8 point) and fats and oils (0.3 point against nil). Add to this the increased contribution of food and housing services (0.5 percentage point against a negative 0.1 point). The following table shows inflation rates and the shares of PPI groups in headline inflation during the years of reporting and comparison:
Share of PPI Groups in Headline Inflation (2004/2005=100)
Inflation Rate during the Period Share in Headline Inflation
(%) (Percentage Point) Main PPI Groups July/June July/June
2009/2010 2010/2011 2009/2010 2010/2011
General Index 8.6 19.4 8.6 19.4 1-Agriculture, Forestry and Fishing, of which:
11.6 23.9 3.7 7.9
Cereals and leguminous crops 1.3 44.6 0.1 1.7 Rice 13.8 75.0 0.1 0.8 Vegetables 37.5 30.1 2.0 2.1 Fruits 6.3 21.4 0.4 1.4 Cotton -11.2 87.4 -0.1 0.5 Poultry and eggs 23.3 1.6 0.8 0.1 Fish -5.0 2.0 -0.1 0.0 2-Mining & Quarrying, of which:
9.8 36.3 2.0 7.3
Crude oil 13.5 48.2 3.0 11.2 Sand and stone 13.8 8.9 0.0 0.0 3-Manufacturing, of which: 6.9 10.3 2.5 3.7 Processed food products, of which: 11.8 12.8 1.0 1.1
Oils and fats 0.5 21.1 0.0 0.3 Dairy products 3.6 8.9 0.0 0.1
Fertilizers 29.9 7.4 0.3 0.1 Wood & products -13.4 35.4 0.0 0.0 Cement 2.0 1.4 0.0 0.0 Iron and steel 19.2 24.2 0.8 1.1
4-Electricity and Gas, of which: 22.0 0.0 0.4 0.0 Electric power generation, transmission and distribution 29.4 0.0 0.4 0.0 5-Water Supply Activities 5.6 0.0 0.1 0.0 6-Transportation and Storage, of which:
0.5 2.0 0.0 0.0
Land transport 3.5 0.0 0.0 0.0 7-Accomodation and Food Services, of which:
-3.5 13.1 -0.1 0.5
Meal serving services in limited service facilities 5.7 17.0 0.0 0.1 8-Information and Communications 0.0 0.0 0.0 0.0 Source: CAPMAS.
- 50 -
2 - Monetary and Banking Developments 2/1 - Monetary and Banking Policy and Monetary Aggregates
2/1/1 - Monetary Policy Embracing price stability as the ultimate objective of the monetary policy, the CBE seeks to bring inflation to an appropriate and stable level that helps build confidence and sustain appropriate levels of investment and achieve the targeted economic growth. The CBE adopted the overnight interbank interest rate as the operational target of the monetary policy, by applying a framework based on the corridor system, within which the ceiling is the overnight interest rate on lending from the bank, and the floor is the overnight deposit interest rate at the bank. The decisions taken by the MPC in the eight periodic meetings held in FY 2010/2011 were responsive to the changes in inflation and the Committee's assessment of inflationary pressures. In these meetings, the MPC decided to keep the CBE key interest rates (the overnight deposit and lending rates) and the discount rate unchanged at 8.25 percent, 9.75 percent and 8.50 percent per annum, in order. These rates were kept applicable at the time of preparing this Report and till the meeting of the Committee on November 24, 2011. In that meeting, the overnight deposit rate was raised by 100 bps to 9.25 percent and the overnight lending rate by 50 bps to 10.25 percent. The discount rate was also raised by 100 bps to 9.5 percent. In light of the political events in Egypt in the second half of the FY, which influenced the pace of economic activity and the performance of financial markets, and affected in turn the available liquidity in the market, the MPC (in its meeting on 10 March, 2011) decided to launch weekly repo operations on a regular basis under the operational framework of the CBE monetary policy, to provide adequate liquidity for banking system units that may face potential liquidity pressures. The MPC assigned a maturity of one week for these operations and an interest rate to be set by the Committee in each meeting. The interest rate on these operations was determined at 9.25 percent per annum, and this rate was kept applicable till the meeting of the Committee on November 24, 2011. In this meeting, the MPC decided to raise the 7-day repo by 50 bps to 9.75 percent.
- 51 -
The following are the CBE’s key interest rates according to the MPC’s decisions in its eight meetings held during FY 2010/2011: Overnight Deposit
Interest Rate Overnight Lending
Interest Rate Lending &
Discount Rate 17 June 2010 8.25% 9.75% 8.50% 29 July 2010 Unchanged Unchanged Unchanged 16 September 2010 " " " 4 November 2010 " " " 16 December 2010 " " " 27 January 2011 " " " 10 March 2011 " " " 28 April 2011 " " " 9 June 2011 " " "
Given the excess liquidity at the banking system in the period starting July 1,
2010 till the end of January 2011, the weighted average of the overnight interbank rate was close to the CBE overnight deposit rate. However, in light of the political events that Egypt went through and their economic impact on the money market, the balance of excess liquidity at the banking system decreased. Accordingly, the weighted average of the overnight interbank interest rate rose in the second half of FY 2010/2011, hovering around the middle of the corridor. (see the following chart)
O/N Interbank rate and Policy Rates
7.508.008.509.009.50
10.0010.5011.0011.5012.0012.5013.0013.5014.00
31 D
ecembe
r 200
7
31 M
arch 2
008
30 Ju
ne 20
08
30 Sep
tembe
r 200
8
31 D
ecembe
r 200
8
31 M
arch 2
009
30 Ju
ne 20
09
30 Sep
tembe
r 200
9
31 D
ecembe
r 200
9
31 M
arch 2
010
30 Ju
ne 20
10
30 Sep
tembe
r 201
0
31 D
ecembe
r 201
0
31 M
arch 2
011
30 Ju
ne 20
11
( ٪ )
Overnight Interbank Deposit facility rate Lending facility rate
- 52 -
The MPC's decisions led to the relative stability of the market interest rates+ on the customers’ deposits and loans, as the average interest rate on deposits with maturities of three months posted some 6.6 percent per annum at the end of June 2011 (against 6.3 percent per annum at the end of June 2010). Concurrently, the average interest rate on loans of one year declined to 11.0 percent per annum, from 11.1 percent. Open Market Operations: The reporting year witnessed a decline in the outstanding balance of liquidity, which the CBE had absorbed through its deposit acceptance operations. This was largely attributed to the higher foreign currency sales by CBE to banks. Within the framework of the open market operations, the balance of deposits accepted by CBE registered some LE 101.5 billion at the end of June 2010, decreasing to some LE 83.1 billion at the end of January 2011 and continued to gradually decline through the rest of the FY. As an outcome of the repo operations launched by CBE to pump liquidity for some banks starting from March 2011, the net open market operations (absorption and injection) revealed liquidity-injecting operations of LE 14.5 billion at end of June 2011. 2/1/2 - Reserve Money Reserve money reached LE 251.0 billion at end of June 2011, up by LE 47.9 billion or 23.6 percent during FY 2010/2011 (against LE 28.0 billion or 16.0 percent a year earlier). The increase in reserve money was reflected in a growth in currency in circulation outside the CBE by LE 34.8 billion and in banks' local currency deposits by LE 13.1 billion. + The data on interest rates (deposits and loans) were compiled using the Domestic Money Monitoring System (DMMS) launched in June 2010.
- 53 -
Reserve Money and Counterpart Assets* (LE mn)
Balances at End of June 2011
Change During the FY
2009/2010 2010/2011
Value Value A- Reserve Money 250992 27967 47921
- Currency in circulation outside the CBE 179096 17985 34843
- Banks' local currency deposits 71896 9982 13078 B- Counterpart Assets 250992 27967 47921 Net Foreign Assets 147197 18502 (43037) Foreign Assets 156331 25550 (42274) Foreign Liabilities 9134 7048 763 Net Domestic Assets 103795 9465 90958 Claims on the Government (Net) 102562 11998 21951 Claims on Banks (Net) 147 28676 (28863) Net Balancing Items 1086 (31209) 97870 * Derived from the CBE’s balance sheet. As for the components of reserve money, the currency in circulation outside the CBE contributed most of the increase (72.7 percent), with a pickup of LE 34.8 billion or 24.2 percent in the said year (against LE 18.0 billion or 14.2 percent a year earlier), to post LE 179.1 billion or 71.4 percent of reserve money at end of June 2011. Moreover, banks' local currency deposits at the CBE augmented by LE 13.1 billion or 22.2 percent in FY 2010/2011 (against LE 10.0 billion or 20.4 percent), ending the year at LE 71.9 billion. The follow-up of the developments in reserve money during the year shows that 68.0 percent of the increase was concentrated in the second half of the year (January/June 2011), namely, the period of January 25th Revolution and its aftermath. In January/June 2011, reserve money scaled up by LE 32.6 billion or 14.9 percent. Moreover, the currency in circulation outside the CBE made the largest impact. In figures, the currency in circulation outside the CBE mounted in this period by LE 25.9 billion or 16.9 percent, representing 74.3 percent of its total increase during the whole year. This was ascribed to the large amounts of banknote issued by the CBE in response to withdrawals from the client deposit accounts, on the back of the circumstances and aftereffects of the Egyptian Revolution.
- 54 - The pickup in currency in circulation outside the CBE was due to the increase in the balance of banknote issue by LE 33.9 billion or 23.2 percent during the year (against a rise of only LE 18.3 billion or 14.3 percent in the previous FY) to reach LE 180.1 billion at end of June 2011.
Banknote Issue* (LE mn)
Change during the Year At End of June Balance of Banknote Issue Value %
2007 93499 14246 18.0 2008 112705 19206 20.5 2009 127912 15207 13.5 2010 146220 18308 14.3 2011 180118 33898 23.2 *Including subsidiary coins issued by the Ministry of Finance. As for the components of the issue cover, the value of gold increased by LE 4.0 billion, as a result of its revaluation on 30 June 2011, to register LE 16.3 billion. Likewise, Egyptian government bonds rose by LE 9.1 billion to LE 131.6 billion. In addition, about LE 12.6 billion worth of foreign currencies and LE 8.2 billion worth of foreign notes were added to the issue cover. Accordingly, the structure of the cover at end of June 2011 was as follows: 73.2 percent as government bonds, 9.1 percent as gold, 13.2 percent as foreign currencies, and 4.5 percent as foreign notes. The breakdown of the currency in circulation outside the CBE by denomination showed that despite the slight decrease in the relative importance of large denominations (LE 200, LE 100 and LE 50) as a percentage of total currency in circulation, they remained at a high level (90.5 percent against 92.1 percent at the end of June 2010). This was largely due to the climbing relative importance of the LE 200 notes from 31.5 percent to 37.2 percent. By contrast, the relative importance of the LE 100 and LE 50 notes declined from 60.6 percent to 53.3 percent. This mirrored the increasing value of transactions associated with higher prices.
- 55 -
Currency in Circulation By Denomination* (LE mn)
June 2010 June 2011 Change During the FY Denominations
Value Relative
Importance Value Relative
Importance 2009/2010 2010/2011 Total 144253 100 179096 100.0 14.2 24.2 Banknote in Circulation 143947 99.8 178772 99.8 14.3 24.2 PT 25 184 0.1 161 0.1 16.3 (12.5) PT 50 292 0.2 302 0.2 (4.9) 3.5 LE 1 843 0.6 907 0.5 9.5 7.6 LE 5 1495 1.0 2654 1.5 18.9 77.5 LE 10 2844 2.0 2886 1.6 (2.3) 1.5 LE 20 5480 3.8 9672 5.4 (13.0) 76.5 LE 50 18704 13.0 22246 12.4 (18.3) 18.9 LE 100 68641 47.6 73269 40.9 12.8 6.7 LE 200 ** 45464 31.5 66675 37.2 49.0 46.7 Subsidiary Coins 306 0.2 324 0.2 6.6 5.9 * Representing the difference between banknote issue and cash at the CBE. ** The LE 200 note has been in circulation since May 2007. The increase in the counterpart assets of reserve money in the said year was attributable to the pickup in net domestic assets and the fall in net foreign assets. Net domestic assets made a positive contribution to reserve money growth (44.8 percentage points), which was held back by the negative contribution of net foreign assets (21.2 points).
During FY 2010/2011, net domestic assets at the CBE went up by LE 90.9 billion, against a rise of only LE 9.5 billion a year earlier, to reach LE 103.8 billion at end of June 2011. The increase came as a result of the rise in the CBE’s net claims on the government by LE 21.9 billion (due to the pickup in its claims on the government by LE 39.3 billion or 26.2 percent, and in its deposits at the CBE by LE 17.4 billion or 24.9 percent). Moreover, the net balancing items had an expansionary effect on reserve money, as it went up by LE 97.9 billion shifting from a negative balance to a positive one. This was mainly ascribed to the LE 99.4 billion decline in the deposits accepted by the CBE under the open market operations (used by the CBE to absorb excess liquidity). Furthermore, the CBE conducted Repo operations to inject liquidity for banks as of March 2011, because of the changes in their liquidity position in light of the higher foreign currency sales of the CBE to banks. The balance of Repo operations registered LE 16.7 billion at the end of June 2011.
- 56 -
The CBE's net claims on banks decreased by LE 28.9 billion, as an outcome of the decline in its claims on banks by LE 26.4 billion. The decline in CBE claims to banks was, in turn, caused by its lower foreign currency deposits at these banks and the rise in banks’ foreign currency deposits with the CBE by LE 2.5 billion worth. Net foreign assets at the CBE rolled back by LE 43.0 billion worth or 22.6 percent, against a rise of LE 18.5 billion worth or 10.8 percent, posting LE 147.2 billion worth at the end of June 2011. The decline was mainly attributed to the drop of LE 42.3 billion worth or 21.3 percent in foreign assets at the CBE during the year (against a rise of LE 25.6 billion worth or 14.8 percent a year earlier), to reach LE 156.3 billion worth at end of June 2011. On the other hand, foreign liabilities at the CBE augmented by the equivalent of LE 0.7 billion or 9.1 percent during the year (against a pickup of LE 7.0 billion worth) to stand at LE 9.1 billion worth at end of June 2011.
2/1/3 - Domestic Liquidity (M2) and Counterpart Assets Domestic Liquidity went up by LE 91.9 billion or 10.0 percent in 2010/2011 (against LE 86.2 billion and 10.4 percent a year earlier), ending the year at LE 1009.4 billion. The rise resulted from the growth in net domestic assets and the drop in net foreign assets. The former made a positive contribution of 13.2 percentage points to domestic liquidity growth. Part of the liquidity was used by banks to purchase treasury bills in the amount of LE 74.0 billion. On the other hand, net foreign assets made a negative contribution of 3.2 percentage points.
Growth Rate of Domestic Liquidity by Component
0
2
4
6
8
10
12
14
16
18
20
2007/2008 2008/2009 2009/2010 2010/2011
%Money SupplyQuasi-moneyDomestic Liquidity
- 57 - The pickup in domestic liquidity was reflected in the acceleration of money supply and quasi-money. Money supply scaled up by LE 34.7 billion or 16.2 percent (against LE 31.0 billion or 17.0 percent); recording LE 248.7 billion at end of June 2011. Most of the rise during the year came on the back of the increase in the currency in circulation outside the banking system by LE 32.7 billion or 24.2 percent (against LE 17.1 billion or 14.4 percent) posting LE 167.9 billion at the end of June 2011. Notably, around three quarters of the rise (74.2 percent) occurred in the second half of the year, in which the currency in circulation grew by LE 24.3 billion or 16.9 percent. This can be explained by the increase in the banknotes issued by the CBE to face the sudden withdrawals of deposits by customers, in the wake of the circumstances and consequences of the 25th January Revolution. Local currency demand deposits at banks rose by only LE 2.0 billion or 2.5 percent (against LE 14.0 billion or 21.6 percent) posting LE 80.8 billion at the end of June 2011. The rise reflected the LE 4.2 billion increase in the deposits of the private sector. By contrast, deposits of the public business sector decreased by LE 2.2 billion.
Quasi-money augmented by LE 57.2 billion or 8.1 percent (against LE 55.2 billion and 8.5 percent a year earlier), reaching LE 760.7 billion at end of June 2011. The increase was traceable to the growth of LE time and saving deposits and foreign currency deposits. In figures, LE time and saving deposits edged up by LE 38.4 billion or 7.0 percent, reaching LE 583.7 billion (representing 76.7 percent of quasi-money and 57.8 percent of total liquidity) at the end of June 2011.
Domestic Liquidity Components End of June 2011
Quasi-money75.4%
Foreign Currency Time & Saving Deposits
13.5%
Foreign Currency Demand Deposits
4.1%
Local Currency Time & Saving Deposits
57.8%
Money Supply24.6%
- 58 -
The surge in LE time and saving deposits of the household sector by LE 52.1 billion exceeded the overall increase recorded in this type of deposits. The increase in these deposits could have been larger but for the decline in the deposits of the private and public business sectors (down by LE 12.5 billion and LE 1.2 billion, respectively). It is to be noted that in the second half of the year, the LE time and saving deposits retreated by LE 8.7 billion or 1.5 percent. The decline was particularly pronounced in the deposits of the private and public business sectors (LE 24.5 billion and LE 2.2 billion in order). However, the rise in the deposits of the household sector (LE 18.0 billion) mitigated the drop in the those of the above sectors.
Foreign currency deposits by all sectors increased by LE 18.8 billion worth or 11.9 percent (against a retreat equivalent to LE 9.1 billion or 5.4 percent) to reach LE 177.0 billion worth or 23.3 percent of total quasi-money at end of June 2011. The increase was entirely achieved in the second half of the year, in which deposits scaled up by the equivalent of LE 18.9 billion or 12.0 percent.
Against these developments, foreign currency deposits/total deposits (dollarization ratio) inched up from 20.21 percent at end of June 2010 to 21.03 percent at end of June 2011. This reflected the propensity for saving in foreign currencies, especially given the uncertainty about the LE fluctuations due to the events in Egypt. However, this trend is somewhat limited, noting that LE time and saving deposits of the household sector still accounted for the bulk (almost 65.8 percent) of total quasi-money at end of June 2011.
Domestic Liquidity Growth Rate by Counterpart Assets
During FY Ending June 2008 2009 2010 2011 Domestic liquidity growth rate (%) 15.7 8.4 10.4 10.0 Net foreign assets (%) 12.8 (6.5) 3.4 (3.2) Net domestic assets (%) 2.9 14.9 7.0 13.2
Domestic credit rose by LE 117.5 billion or 15.2 percent in the year under review (against LE 79.9 billion or 11.5 percent a year earlier) to stand at LE 892.8 billion at end of June 2011. About three quarters of the increase (74.6%) was realized in the second half of the year, as domestic credit moved up by 10.9 percent or LE 87.7 billion, of which 82.8 percent went to the government sector.
- 59 -
Receiving around 94.6 percent of the rise in domestic credit, the share of the government (including public economic authorities) expanded by LE 111.2 billion or 34.1 percent (against LE 53.0 billion or 19.4 percent) posting some LE 437.3 billion at end of June 2011. Such an increase reflects the rise in banks’ holdings of government securities by LE 102.4 billion, and in loans to the government by LE 30.7 billion, on the one hand, and the pickup in its deposits at banks by LE 21.9 billion, on the other hand.
Credit granted to the household sector climbed by LE 6.4 billion or 6.9 percent
(against LE 8.2 billion and 9.7 percent) bringing its indebtedness to LE 99.2 billion. The share of public business sector also picked up by LE 3.0 billion or 10.0 percent (against a decline of LE 3.2 billion or 9.5 percent in the previous year, due to the settlement of its non-performing loans with banks) reaching LE 33.0 billion at end of June 2011. Credit to the private business sector rolled back by LE 3.1 billion or 1.0 percent (against an increase of LE 21.9 billion or 7.2 percent) lowering its debts to banks to LE 323.2 billion at end of June 2011. Accordingly, the relative structure of credit ran as follows: 49 percent to the government, 36.2 percent to the public business sector, 11.1 percent to the household sector and 3.7 percent to the private business sector.
Domestic Credit by Sector (End of June)
0100200300400500600700800900
1000
2006 2007 2008 2009 2010 2011
LE bnHousehold SectorPrivate Business SectorPublic Business SectorGov. Sector (Net)
- 60 -
Net foreign assets at the banking system (expressed in local currency) declined by LE 28.9 billion or 10.2 percent (compared to a surge of LE 28.3 billion or 11.1 percent), ending the year at LE 253.5 billion. Noticeably, the decline occurred in the second half of the year, where net foreign assets fell by LE 51.8 billion. Yet, the rise of LE 22.8 billion in the first half of the year had somewhat mitigated such a decline. The decline came as a result of (i) the drop in net foreign assets at the CBE by LE 43.0 billion (due to the LE 42.3 billion fall in its foreign assets, and the LE 0.7 billion rise in its foreign obligations) and (ii) the build up of net foreign assets at banks by LE 14.1 billion.
Relative Structure of Domestic Credit(End of June 2011)
49.0
3.7
11.1
36.2
Gov. Sector (Net) Public Business SectorPrivate Business Sector Household Sector
(%)
0
100
200
300
400LE bn
2007 2008 2009 2010 2011
Foreign Assets & Liabilities of the Banking System at End of June
Foreign Assets
Foreign Liabilities
- 61 -
Net balancing items exerted an expansionary effect on domestic liquidity of LE 3.3 billion. This was brought about by the increase in capital accounts by LE 24.3 billion, coupled with a decrease in inter-bank net credit and debit positions by LE 15.2 billion, and in net unclassified assets and liabilities by LE 5.8 billion.
2/1/4 – Payment Systems and Information Technology (IT)
Vast efforts were and currently are being exerted to enhance and develop
payment systems in Egypt. Such task is vital and specific to CBE to bolster the soundness and stability of the financial system, reduce credit risk, expedite payment settlements, and ensure their reliability and confidentiality. The existence of a national payment system proved to be instrumental to the financial stability in Egypt, especially during the 25th of January Revolution, leading as such to the stability of the whole banking system. And with reference to that, such efforts can be summed up as follows: Payment Systems • The continual use of the RTGS system to perform interbank transfers among
Egyptian banks. RTGS as well serves as a tool to monitor banks' accounts in EGP held at the CBE which in turn assists Egyptian banks to manage their required reserve at the CBE.
• The project of automating the payment of government employees salaries through
cards is moving forward cooperatively with the Egyptian Ministry of Finance after a transitional pause over the 25th of January revolution. A number of governmental units are in actual operations in conjunction with the National Bank of Egypt. It is worth mentioning that 1 million salaries bank cards have been issued in addition to other 1 million cards of pensioners and a million and a half cards for pensioners issued by National Institute for Insurance and Pensions. Such vast value of that project has been witnessed, particularly, minimizing the risks of physical transfer of salaries cash from banks to the related governmental units in addition to the cases witnessed in the post-revolution timings when human tellers have been much of an exposure to attacks in some areas. However, the project currently needs the support of the Ministry of Finance to activate the disbursement of salaries through cards given to employees as the project is currently suspended.
• A revision of ACH direct debit rules has been finalized. Direct debit services will be
executed between EBC "Egyptian Banks Company for Technological Advancement" and commercial banks in Egypt and is planned to go into a piloting phase through Q2, 2012. Such payment services of direct debit will allow and facilitate the expansion of electronic- based payment operations which would –in turn- speed up money transfer among individuals and consequently, add to the national product.
- 62 - • Direct credit services have been operative among banks and through the ACH in
EBC. The volume of monthly transactions represented around 200 thousands with an expected gradual increase.
• Government payments are being automated in conjunction with the Ministry of
Finance to be executed through banks and the ACH instead of being executed via paper cheques. Such project is meant to enhance the procedural efficiency and to impose better control of MOF to government payments in alliance with national budget. It is expected to inaugurate this project through Q3, 2012.
• The CBE is currently gearing to join the COMESA clearing house. Such initiative
aims at enriching the commercial and financial exchange with the COMESA countries as a major contributor to the Egyptian national security. The related internal rules and procedures are being studied with in the Central Bank of Egypt parallel to the sign-off of the related agreements with COMESA and the Central Bank of Mauritius.
• A preliminary draft of "Strategic Framework for Payment Systems in Egypt 2012-2017" has been finalized and is planned to be presented to CBE top management seeking to be signed-off.
Information Technology • The CBE is in the process of developing the database of the banking sector units, by
setting up a data warehouse conforming to the international standards. The warehouse is designed to help the CBE sectors to have access to accurate and transparent reports, to be able to monitor the performance of the banking sector units and make informed decisions.
• The establishment of a permanent Disaster Recovery (DR) site for the CBE is on
track, to be functional in emergencies as an alternative to the main center at El-Gomhoria building. This is intended to ensure the continuity of IT services, in a timely and accurate manner, taking into account that the DR site should meet the international standards. The site is to be located in the CBE building in Tanta and a study was approved for this purpose. The CBE in cooperation with the project consultant are preparing the REP for the site preparation, providing that another RFP will be issued for IT equipments.
- 63 - • Given the mounting risks associated with the internet banking services, the CBE
embarked on a project that mandates the banks providing the services to identify and assess the weaknesses and vulnerabilities of their data networks that serve the internet banking systems and the website. Banks are also required to review the design of information security systems, and conduct security assessments with specialized companies. During this project, banks are required to conduct Vulnerability Assessment, remediate the vulnerabilities and submit the final results to CBE.
• The electronic “Auction Portal System” was introduced to automate the
procedures of bidding for Treasury bill and bond auctions, and the CBE’s certificates of deposits (CDs). By virtue of this system, primary and secondary dealers can bid online, according to specific regulations, via the secure and private data network (Extranet) whereby banks and the CBE are inter-connected.
• According to the plan of developing the IT systems that serve the Printing
House, assistance has been provided to the Printing House to migrate their IT applications to be compatible with the other modernized systems in place at the CBE. Recognizing that upgrading the IT infrastructure at the Printing House is a prerequisite for developing the above-mentioned systems, the CBE has proceeded with studying the upgrading of the infrastructure of the IT & Communication systems serving the Printing House.
• Under the plan of developing the CBE branches and modernizing their IT
applications, the unification of the Bank’s accounting system is under consideration, to be generalized in all branches (Alexandria, Mohandessin & Port Said). For this purpose, preliminary steps have been taken, starting with Alexandria branch and ending with Port Said branch as scheduled.
• Kasr El Nile Project: IT sector has participated in the design & supervision of the
IT infrastructure that serves the building. 2/1/5- RTGS and SWIFT Local Services
Data on local banking transfers under the RTGS system in FY 2010/2011, applied
as of mid-March 2009, showed an increase in the number and value of the executed
- 64 - messages, registering 1248.7 thousand messages at a value of LE 15879.7 billion (against 1191.4 thousand messages and LE 13274.7 billion a year earlier). It is worth mentioning that these transactions include banks' and clients' transfers, operations of treasury bills, and Misr for Central Clearing, Depository and Registry (MCDR), in addition to corridor operations and deposits for monetary policy purposes.
RTGS and SWIFT Local Services in Local Currency
FY Number of
Messages (Unit) Value of Transfers
(LE mn) Change During the Year
Number Value
2007/2008 700668 3092401 175432 8122032008/2009 897205 5294357 196537 22019562009/2010 1191374 13274677 294169 79803202010/2011 1248692 15879701 57318 2605024
According to the statistics of the CBE Automated Clearing House, included in the RTGS since its launch, the number of exchanged cheques increased in the reporting year to 13012 thousand (from 12994 thousand a year earlier). Likewise, their total value edged up to LE 626.8 billion from LE 584.5 billion. As a result, the average value per cheque inched up to LE 48.2 thousand from LE 45.0 thousand.
FY Number of Cheques
(thousand)
Value of Cheques (LE mn)
Change Number Value
2007/2008 11724 483113 11.9 35.4 2008/2009 12062 548038 2.9 13.4 2009/2010 12994 584546 7.7 6.7 2010/2011 13012 626757 0.1 7.2
Transactions executed in foreign currencies under the Fin-Copy system, via SWIFT, showed an increase in terms of number and value. Executed transactions reached 15.1 thousand in number, at a value of US$ 88.1 billion (against 12.2 thousand at a value of US$ 70.0 billion in the previous FY).
SWIFT Local Activity in US Dollar
FY Number of
Messages (Unit) Value of Transfers
(US$ mn) Change During the Year
Number Value
2007/2008 13925 105587 1855 26590 2008/2009 12365 83019 (1560) (22568) 2009/2010 12204 70008 (161) (13011) 2010/2011 15066 88052 2862 18044
- 65 -
2/2 - Banking Developments 2/2/1- Banking Reform
In continuation of the banking reform program, launched in September 2004, the
Central Bank has finalized the preparations for the second phase (2009 - 2011). This phase aims at raising the efficiency and soundness of the Egyptian banking sector, and enhancing its competitiveness and ability for risk management so that it can perform its role in financial intermediation in support of the national economy, and achieve the targeted development. The reform program is based on a number of pillars, namely:
• Preparing and implementing a comprehensive program for the financial and administrative restructuring of specialized state-owned banks (the Principal Bank for Development and Agricultural Credit, Egyptian Arab Land Bank, and Industrial Development and Workers Bank of Egypt), which is expected to positively affect these banks’ performance.
• Following up -on periodic basis- the results of the first phase of restructuring the
state-owned commercial banks (the National Bank of Egypt (NBE), Banque Misr (BM) and Banque du Caire (BdC)), The follow-up showed that the first phase of the reform program (2004/2008) had already yielded fruit and positively affected the performance of those banks. In the second phase, all requirements necessary for enhancing the efficiency of said banks in terms of financial intermediation, risk management, human resources, and IT, would be met to ensure the continued improvement of their financial performance and competitiveness.
• Applying Basel II standards in Egyptian banks to enhance their risk management
practices. In this context, a protocol had been signed with the European Central Bank and seven national European central banks to provide a three-year technical assistance program launched on 1 January 2009, to implement Basel II requirements in the Egyptian banking sector. It is worthy to note that the strategy of the CBE in implementing Basel II framework, which was announced for Egyptian banks and the relevant parties in an extensive meeting held on Oct. 2009, is based on two main principles; simplicity and consultation with Egyptian banks, to ensure banks’ compliance with these standards. According to the above-said strategy, Basel II standards should be phased in over the following stages:
- 66 -
- The first stage (January - June 2009) focused on the capacity building of the CBE’s core team and elaboration on the Egyptian strategy for Basel II implementation.
- The second stage (July 2009 - June 2011) - the pivotal stage of the reform
program - covers extensive coordination with the banking sector, through issuing discussion papers related to the most important topics and selection of the most appropriate methods for application in Egypt, taking into consideration similar experiences in other countries that have implemented Basel II. Moreover, the quantitative impact of studies (QIS) of the possible consequences of Basel II standards will be measured before the mandatory application.
- The third stage (July - December 2011) will focus on the fine-tuning of
future supervisory regulations related to Basel II, taking into account the legal aspects and development of corrective action plans commensurate with the different types of banks, according to the QIS results for each bank on a case by case basis. Also, a parallel run of existing regulations and Basel II will be applied upon issuance, and a new data warehouse will be implemented to support the future updated supervisory regime.
- The fourth stage (on going) - a parallel run of Basel II and existing
regulations concerning capital adequacy will be applied upon issuance. Moreover, the data warehousing framework will be completed.
• Adopting an initiative promoting the development and growth of banking
activities/services catering and access to finance for various sectors, especially small- and medium-sized enterprises (SMEs). In this context, to encourage banking credit to small- and medium-sized enterprises (SMEs), the CBE exempted banks' deposits -equivalent to the size of loans extended thereby to finance SMEs- from the reserve requirement ratio (14 percent). It is noteworthy that poor access to adequate, timely and reliable statistical data and information is one of the main obstacles to the improvement and finance of small-and medium-sized enterprises (SMEs). Hence, the Central Bank of Egypt and the Egyptian Banking Institute (EBI), in collaboration with the Central Agency for Public Mobilization and Statistics (CAPMAS), embarked on a field survey of small-and medium-sized enterprises (SMEs) covering all the governorates of Egypt, on the basis of the full count approach. The first stage, conducted in Al Sharqiya Governorate, had been completed, and in the light of its results, the
- 67 -
survey was carried out in the rest of the governorates. It is worthy to mention that twenty other governorates were surveyed up to June 2011. According to the findings, a database will be set up and is to be periodically updated. During the period of preparing this report, all governorates were covered and the database is expected to be inaugurated in February 2012.
• Reviewing and strictly applying the international governance rules to the Egyptian banking sector and the CBE. In this context, regulations on bank governance were approved by the CBE Board with the aim of helping banks to set/develop their governance systems. As such, each bank shall apply these regulations in accordance with the volume and complexity of its activities, and strategy, as well as capacity for risk management. Before issuing the said regulations, they were submitted to officials in the Egyptian Financial Supervisory Authority (EFSA) within the framework of coordination of the regulatory authorities of the financial sector.
Preparations for the second phase of the banking reform program have
proceeded, following the successful implementation of the first phase, which was centered on four pillars: (1) consolidation and privatization of the banking sector, (2) financial and managerial restructuring of state-owned banks, (3) addressing of the non-performing loans issue, and (4) upgrading of the Supervision Sector at the CBE.
As for the first pillar, some voluntary and regulatory-forced mergers took place, leading to a decrease in the number of banks operating in Egypt from 57 at end of December 2004 to 39 banks at end of December 2008. The number had underwent no change so far. Under this program, 80 percent of the share capital of the Bank of Alexandria was sold to Italy’s Sanpaolo Bank, besides the divestiture of the shareholdings of state-owned banks in a number of joint venture banks.
With respect to the second pillar, state-owned banks were restructured under a
comprehensive and time-lined program, designed by the Banking Reform Unit at the CBE. The program was intended to reform the practices of all departments and technological systems, besides establishing new departments, particularly for risk management, information technology (IT), and human resources. To this end, a project on the application of the international best practices - implemented with the assistance of foreign consultants - was completed on time. In addition, a full audit of state-owned banks was conducted according to the international accounting standards, covering the years from 2004 to 2008. Finally, the recruitment of highly qualified banking cadres and leaderships at state-owned banks (with finance from the Banking Reform Fund) enabled those banks to push ahead with reform and development.
- 68 -
Concerning the third pillar, to address the problem of non-performing loans, the CBE's NPL Management Unit worked out a variety of approaches and programs that helped settle more than 90 percent of NPLs (excluding debts of the public business sector). With regard to the non-performing loans of public business sector enterprises to public banks, about 62 percent was repaid in cash to the public commercial banks. As for the remaining debts (38 percent), an agreement was signed on 14/9/2009 whereby the in-kind repayment of the remaining debt was made by the end of June 2010.
A program for the reform of the Supervision Sector was devised to achieve the
following targets: enhance the efficiency of this sector by benefiting from the international best practices, and apply the concept of risk-based supervision to ensure the sector’s robustness and soundness. Furthermore, efforts were exerted to recruit highly qualified staff versed in advanced technology, enhance the efficiency of human cadres to be capable of managing this key sector, and upgrade the management information system (MIS) to ensure timely access to accurate data. In this context, a technical assistance program in collaboration with the European Central Bank (ECB) and four European central banks, was completed in the last quarter of 2007.
It is worthy to note that the successful and timely implementation of the first phase of the CBE's banking reform program has helped this sector to weather the adverse effects of the global financial crisis and to deal efficiently with the current circumstances.
As to the asset quality indicators at banks, the ratio of non-performing
loans/total gross loans decreased from 13.6 percent at end of FY 2010 to 11 percent at the end of FY 2011, due to the fact that state-owned banks wrote off a number of non-performing loans. Moreover, provisions/total non-performing loans increased from 92.5 percent to 93.6 percent. 2/2/2- Supervision Sector
Being the regulator of banks in Egypt, the CBE aims to ensure the soundness of
banks’ financial positions and evaluate their performance from the perspective of risk-based supervision. In addition, it ascertains banks’ compliance with the established regulatory standards, including the minimum reserve requirement and liquidity ratios, the maximum limits of a bank’s exposure to a single customer along with his related parties, and exposures abroad, as well as the asset-liability matching in terms of
- 69 -
maturity and currency. This is in addition to a number of qualitative standards that ensure the soundness of banks’ performance and the safety of depositors’ funds, including governance rules; information systems efficiency rules; and eligibility and competency criteria for officials and managers of key sectors at banks.
The implications of the financial crisis bore out that the instructions and reform
policies adopted by the CBE to restructure banks, raise their capital and strengthen their risk management systems were instrumental in containing the effects of this crisis. Moreover, the CBE had thoroughly monitored the financial crises in many countries and especially in the euro area, so as to be capable of making immediate decisions - when necessary - to counteract the spillovers in due time.
Hereunder are the decisions taken by the CBE over the last quarter of FY
2010/2011 and the period that followed:
1. Providing banks with Quantitative Impact Studies (QIS) under Pillar II regarding liquidity, concentration risks, and to launch pilot testing before issuing related supervisory instructions.
2. Allowing banks -in response to the extraordinary events in the Egyptian stock
market- to reclassify financial assets held for trading from January 1st till the end of June 2011.
3. Enhancing the bank’s concentration risk management through issuing a
regulation that sets exposure limits to countries, financial institutions (banks) and financial groups abroad.
4. Requiring banks to open an account under the name of "Zewail City for Science
and Technology" to accept donations for this project, and another account to raise donations for the eradication of slums. Received donations shall be transferred to the two accounts created by the CBE for the same purpose.
The CBE issued a number of instructions during FY 2010/2011, which are mainly:
1. Underpinning and supporting the banking sector to help it face the current event
or current crisis through issuing a regulation that: a. Offer special treatment to retail and corporate loans in light of the current
crisis.
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b. Postpone the deduction of additional impairment on the excess of banks’ investments in non-financial companies over 40% of the company’s issued capital.
2. Directing banks to decrease the concentration of loans and advances in the form
of overdrafts.
3. Extending cash cover exemptions on all meat, poultry and sugar imports -by merchants (for trading purposes) or by government entities- from the 50 percent minimum cash cover requirement till end of December 2011.
4. Setting limits on transfers abroad and cash withdrawals by individuals, as well as
requiring banks to submit weekly statements on loan balances, client deposits, and the two liquidity ratios and daily statements on cash withdrawals/deposits, and inward/outward external transfers.
5. Postponing the consideration of requests from banks in Libya -submitted on
behalf of their customers- to liquidate their letters of guarantee issued for investment projects, until the political landscape improves in Libya.
Seeking to enhance governance rules in the banking system, the CBE's Board of
Directors approved - on its session of 6 April 2004 - the competency criteria for chairmen, board members and executive managers of banks to make sure that they are qualified for their posts. Competency criteria were modified on 24 November 2009, where a new criterion was introduced, prohibiting any official to simultaneously combine between two positions as a senior manager in a bank and a member of the board of directors of another bank. The new criterion was applicable to future nominations, with the exception of those banks entirely owned by a bank. It intended to prevent any conflict of interests, in compliance with good governance practices. In addition, interviews are made with the chairmen, deputy chairmen, managing directors, executive board members of banks and executive directors to ensure their eligibility for the positions they are nominated for, with a particular attention being paid to candidates for risk- and compliance-related positions.
- 71 -
As for foreign nominees at banks (board members and executive managers), a
criterion was set, whereby the regulatory authority of the parent bank, or the last bank the nominee has worked in (as the case may be) is to be consulted about that nominee, to identify his/her eligibility for the vacant position. In this context, the register of banks witnessed the addition of five chairmen, five vice-chairmen, three managing directors, four executive board members, twenty six non-executive board members, two specialized members, a regional manager for a foreign bank branch, a regional deputy manager for another foreign bank, seven chief executive officers for representation offices in Egypt, one general manager and one executive director in a bank, and two executive directors at risk, compliance, credit, investment, treasury and internal inspection departments.
In light of the study conducted on some of the banks' statutes relating to the
periodicity and place of board meetings of banks, the CBE Board of Directors agreed, on its session dated 20 June 2009, to exceptionally allow board meetings to be held outside Egypt just for once during the fiscal year.
On the other hand, amendments to certain articles of the statute of eleven banks
and the addition of 86 new branches of 24 banks were recorded in the register of banks.
In line with the policy of the CBE that promotes the growth and geographical expansion of banks by opening small branches, a number of standards and regulations were proposed and are currently raised to the senior management for approval after studying the experiences of several countries such as the United States, Japan, China and Saudi Arabia, to choose the most optimal and appropriate one for the Egyptian market. The said branches shall provide a number of specific services. These are exclusively the following:
• Conducting withdrawal/deposit operations, and currency conversion transac-tions via ATM terminals.
• Receiving and sending requests to the concerned departments in the bank to complete their procedures.
• Offering installment credit for the purchase of durable goods. • Marketing and promoting bank products. A benchmark of LE 10 million of a bank's core capital was set for each small
branch. The working hours of each branch shall be determined according to the requirements of its location and the employees of each branch shall not exceed three qualified persons.
- 72 -
The CBE is currently in the process of updating the rules of examining the
documents required from the houses of expertise (that are qualified for participating in the evaluation of guarantees provided to banks) to be listed in the register of houses of expertise at the CBE (63 houses of expertise were listed). This step is bound to raise the efficiency and effectiveness of the credit decisions made by banks to prevent the recurrence of the problem of non-performing loans. Moreover, the auditors authorized to audit the financial statements of banks shall be registered in a special register, in conformity with specific criteria that ensure a satisfactory degree of efficiency and expertise. 30 new auditors were recorded during the reporting year.
Recently, banks have been eager to provide e-banking services to keep pace with
the technological progress in this field. Such services are either traditional or innovative (effected via electronic networks) and had been regulated earlier by the rules issued by the CBE Board of Directors on 28 February 2002. Later, on 2 February 2010, the CBE Board of Directors approved the regulations governing the operation of payment orders via mobile phones in Egypt. Furthermore, the CBE has proceeded with updating the rules of internet banking, so as to reduce the risks inherent in e-banking services.
It is worth mentioning that six banks were licensed, during the reporting year, to
introduce electronic bill payment service via the ATM terminals and branches in cooperation with Fawry Company for Banking and Payment Technology Services.
The CBE allowed banks to participate in the establishment of the different types
of mutual funds, regardless of the type, to cater for risk-averse investors who have cash money but lack the necessary experience, know-how, or time to invest in tools that yield good returns. Nine banks were given approval to start procedures for establishing eleven new mutual funds.
In order to encourage individuals to save, registered banks were allowed to issue saving systems of three years or more, with some privileges, to be able to raise their market interest rates above the short-term interest rates. Also, banks were permitted, during this year, to issue new saving vessels and to make adjustments to the existing ones, with the aim of increasing the volume of medium- and long-term savings, to help banks finance production and industrial enterprises.
- 73 -
To organize dealing in the Forex market in Egypt and maximize savings received
from workers abroad, off-site supervision is exercised on Forex dealers, and money transfer companies in Egypt, according to the Law of the Central Bank, Banking Sector and Money.
In this respect, it is worthy to note that while the report is being prepared, three
new companies, and 24 branches were registered as currency exchangers, thus bringing the total number to 448 nationwide.
Moving to tourism services, the CBE - pursuant to the above-mentioned Law -
has licensed shops in customs areas at airports to sell in foreign currencies along with the Egyptian pound, with the aim of covering part of the State’s resources of foreign currencies and encouraging tourism. As such, nine shops in the free zones were granted such a license, bringing their total number to 79 shops at the end of the preparation period of the report.
As part of the ongoing efforts made by the General Department for Credit Risk
Pooling to enhance the efficiency and transparency of the credit registration system, the following steps were taken:
• An extensive meeting was held on 15 July 2010, attended by bank officials, to
discuss the data received by the department. The aim of the meeting was to pinpoint the problems and difficulties facing banks when sending data, and the precautionary actions to be taken in this respect, to ensure that informed credit granting decisions be made.
• The provision of more detailed information on customers of judicial procedures
and settlements was considered. Also considered was separating the debt settlement customers from those of rescheduling debt when notifying banks of the positions of these customers, to set regulatory standards and rules and make modifications in line with the changes and circumstances of the banking sector. In view of the current circumstances, the Department for Credit Risk Pooling has
continued to perform its usual tasks. To elaborate, the department receives banks' statements on the volume of credit facilities granted thereby to customers, on the CBE's website, prepares the aggregate positions of those customers, as well as the memorandums to be presented to the senior management, and responds to the complaints filed by bank customers pertaining to credit risk information.
- 74 -
As regards on-site supervision, the CBE made great progress with the 2010/2011
plan for the inspection of the banking sector units (banks) and foreign exchange bureaus. Under this plan, each bank is inspected (either in full scope or target/limited) on an annual basis, according to the level of its risks and the quality of its products and activities. Moreover, an examination of certain issues is made, to help take immediate corrective actions as deemed necessary, needless of waiting for the full inspection of those banks to be carried out. In addition, the system of specialization-based examination was adopted to enable bank inspection to be conducted by inspectors specialized in the relevant activities (e.g. retail banking, market risks, IT, etc.). That approach is meant to render the inspection process more effective and in-depth by providing a thorough risk profile of the inspected bank. In this context, a core team was formed to follow up and manage IT systems, in collaboration with off-site supervision. The aim is to identify common risk areas at banks, especially those of high incidence, and monitor progress on the execution of corrective actions.
The inspection reports made lately have helped to upgrade the risk management
framework in several banks and further the application of the international best practices in this field.
Furthermore, the main concern as of February 2011 was to check on the outflow
transfers made by Egyptian banks, being guided in this respect by the relevant instructions of the CBE - in cooperation with the departments concerned - in the aftermath of the latest events that hit the country. Moreover, the CBE continued to update the bank inspection reports under the usual plan, taking into account the said circumstances.
On the other hand, the Supervision Sector at the CBE continued to cooperate
with the supervisory and judicial authorities in settling a number of money and banking issues. Moreover, the Sector examines the complaints filed by bank customers and provides the required banking expertise.
2/2/3 - Overview of the Aggregate Financial Position of Banks
The aggregate financial position of registered banks in Egypt (39 banks) posted LE 1269.7 billion at the end of June 2011, rising by LE 49.0 billion or 4.0 percent in FY 2010/2011 (against LE 128.7 billion or 11.8 percent in the previous FY). The increase came about despite the fall of LE 13.2 billion in the second half of the year, due to the decrease of LE 101.1 billion in the balances held with local banks (including the CBE). The fall was somewhat subdued by the rise of securities and investments (LE 33.0 billion), balances with banks abroad (LE 28.9 billion), and lending and discount
- 75 -
balances (LE 16.1 billion). The aforesaid retreat of the balances with local banks is attributed to the decline in their obligations to the CBE by LE 103.4 billion.
The increase on the liabilities side is mainly ascribed to the growth of deposits by
LE 64.5 billion or 7.2 percent, to LE 957.0 billion or 75.4 percent of the aggregate financial position of banks at the end of June 2011. Other factors at work included banks’ augmentation of their equity by LE 6.0 billion or 8.0 percent, and the pickup in bonds and long-term loans by LE 4.5 billion or 20.7 percent. However, the rise was offset by the decline in obligations to local banks (including the CBE) by LE 25.7 billion or 47.7 percent, in addition to the drop in their provisions by LE 15.3 billion or 21.7 percent. Likewise, obligations to banks abroad fell by LE 5.1 billion worth or 25.3 percent.
Banking Liabilities & Relative Importance of their ComponentsEnd of June
0%
20%
40%
60%
80%
100%
2009 2010 20110
300
600
900
1200
1500LE bn
Equities Provisions Bonds & Long-term LoansObligations to Local Banks Obligations to Banks Abroad Total DepositsOther Liabilities Total Liabilities-Right Scale
Growth Rate of the Banking System's Liabilities (%)
12.1
33.3
1.0
-13.4
314.0
11.6
10.2
10.7
26.7
-22.6
-21.7
20.7
-6.4
-71.5
-25.3
7.2
23.2
-1.6
Capital
Reserves
Provisions
Bonds & Long-term Loans
O bligations to Local Banks
O bligations to the CBE
O bligations to Banks Abroad
Total Deposits
O ther Liabilities
2010-20112009-2010
- 76 -
The pickup on the assets side was largely a result of the increase in banks'
investments in securities and TBs by LE 68.3 billion or 16.8 percent, to LE 474.2 billion or 37.3 percent of the aggregate financial position of banks at the end of June 2011. Similarly, balances with banks abroad (excluding the CBE) scaled up by LE 38.7 billion or 67.5 percent, and so did lending and discount balances (up by LE 8.1 billion or 1.7 percent, to LE 474.1 billion). In contrast, balances with local banks shrank by LE 83.7 billion or 41.7 percent.
The increase in banks' investments in securities and bills during the year was traced, in the first place, to the rise in their investments in treasury bills by LE 74.0 billion and in government bonds by LE 22.9 billion. However, the rise was held back by the contraction in banks' invest- ments in foreign securities by LE 24.2 billion and in non-government bonds by LE 4.1 billion. Interbank Transactions Transactions with Banks Abroad
Net transactions of local banks with correspondents abroad (expressed in local currency) revealed a rise in their net credit balances abroad by LE 43.8 billion. As such, their net transactions with banks mounted to LE 80.9 billion at the end of June 2011 (against LE 37.1 billion at the end of June 2010). The rise was brought about by the increase in their balances at banks abroad by LE 38.7 billion, and the decline in their obligations thereto by LE 5.1 billion.
Growth Rate of the Banking System's Assets (%)
11.9
22.0
-15.8
20.6
-25.6
8.4
15.5
19.1
16.8
-3.4
-45.9
67.5
1.7
19.5
Cash
Securities & Investments in TBs
Balances with Local Banks
Balances at the CBE
Balances with Banks Abroad
Loan & Discount Balances
Other Assets
2010-20112009-2010
Relative Structure of Banks' Portfolio Investment
43.0
33.8
3.78.2 11.3
52.4
2.36.9 4.6
33.7
0
10
20
30
40
50
60
TreasuryBills
Gov.Bonds
Non-gov.Bonds
Corp.Equities
ForeignSecurities
%
June 2010June 2011
The Banking System's Assets & Relative Importance of their Components (End of June)
0%
20%
40%
60%
80%
100%
2009 2010 20110
300
600
900
1200
1500LE bn
Cash Securities & Investments in TBs
Balances with Local Banks Balances with Banks AbroadLoan & Discount Balances Other Assets
Total Assets-Right Scale
- 77 -
Transactions with Banks Abroad
(LE mn) Change during FY
At End of 2009/2010 2010/2011
June 2010
June 2011 Value % Value %
Net Financial Position 37066 80912 (21859) (37.1) 43846 118.3 Balances with banks abroad 57371 96080 (19749) (25.6) 38709 67.5 Obligations to banks abroad 20305 15168 2110 11.6 (5137) (25.3)
2/2/4 - Interbank Transactions in Egypt
The volume of transactions among banks in Egypt in the interbank market, in terms of deposits, declined by LE 0.7 billion or 3.4 percent (against LE 3.7 billion or 15.8 percent in the year of comparison). The decline was an outcome of the fall in local currency deposits by LE 2.0 billion and in those in foreign currencies by the equivalent of LE 1.3 billion. 2/2/5 - Deposits
In FY 2010/2011, banks' deposits (including government deposits) edged up by LE 64.5 billion or 7.2 percent (against LE 82.8 billion or 10.2 percent in the previous FY), posting LE 957.0 billion or 75.4 percent of the aggregate financial position of banks at the end of June 2011. A considerable part of the total increase in deposits during the reporting year (60.2 percent) emanated from the rise in local currency deposits by LE 38.8 billion or 5.7 percent, to end the year at LE 724.9 billion. Likewise, deposits in foreign currencies increased by LE 25.7 billion worth or 12.5 percent.
Deposits in the Interbank Money Market(End of June)
02000400060008000
100001200014000
2010 2011
LE mn
Local Currency Foreign Currencies
Growth in Deposits by Currency
-20
0
20
40
60
80
100
2009/2010 2010/2011
LE bn
Local Currency Foreign Currencies
- 78 -
Deposits at Banks by Sector (LE bn)
End of June Local Currency Foreign Currencies 2009 2010 2011 2009 2010 2011
Total 598.6 686.1 724.9 211.1 206.4 232.1 Government sector 49.6 58.5 56.7 41.5 45.6 51.4 Public business sector 28.8 32.7 29.3 8.7 6.5 7.6 Private business sector 104.3 114.4 104.0 58.3 54.9 60.2 Household sector 413.5 477.9 532.0 100.2 96.9 109.2 External sector 2.4 2.6 2.9 2.4 2.5 3.7
The household sector was the major contributor to the rise of local currency
deposits at the end of June 2011. Its deposits scaled up by LE 54.1 billion or 11.3 percent, registering LE 532.0 billion or 73.4 percent of the total. In contrast, declines were seen in the deposits of the private business sector (by LE 10.4 billion), the public business sector (by LE 3.4 billion) and the government sector (by LE 1.8 billion). On the other hand, the household sector was again the main contributor to the rise in foreign currency deposits. Its deposits picked up by the equivalent of LE 12.3 billion to LE 109.2 billion (47.1 percent of total foreign currency deposits at the end of June 2011). Those of the government sector rose by the equivalent of LE 5.8 billion, to LE 51.4 billion worth, and so did the deposits of the private business sector (by LE 5.3 billion), the external sector (up by LE 1.2 billion), and the public business sector (up by LE 1.1 billion).
Rate of Change in Deposits by Sector
(30)(20)(10)
01020304050
2009/2010 2010/2011 2009/2010 2010/2011
Local Currency Foreign Currencies%
Government Sector Public Business Sector Private Business SectorHousehold Sector Foreign Sector
- 79 - 2/2/6 - Lending Activity
Banks' lending and discount balances mounted by LE 8.1 billion or 1.7 percent (against LE 36.0 billion or 8.4 percent), reaching in total LE 474.1 billion, thus making up 37.3 percent of total assets and 49.5 percent of total deposits at the end of June 2011.
Change in Bank Loans by Sector in FY 2010/2011
(LE mn) End of June Local Currency
Change Foreign Currencies
Change Total 14110 (5961) Government sector 2802 (2384) Public business sector 3509 (634) Private business sector 2116 (4509) Household sector 5846 569 External sector (163) 997
The pickup in the lending and discount balances was an outcome of the rise in local currency loans by LE 14.1 billion or 4.5 percent, to score LE 327.8 billion at the end of June 2011, and the decline in lending and discount balances in foreign currencies by LE 6.0 billion or 3.9 percent, posting LE 146.4 billion. Around 41.4 percent of the increase in local currency loans went to the household sector (up by LE 5.8 billion or 6.5 percent, against LE 11.4 billion and 14.5 percent). Moreover, increases were observed in loans for the public business sector (LE 3.5 billion), the government sector (LE 2.8 billion) and the private business sector (LE 2.1 billion). In contrast, loans to the external sector decreased by LE 0.1 billion. As for loan and discount balances in foreign currencies, the decline primarily reflected the fall in loans to the private business sector by LE 4.5 billion worth or 4.4 percent and to the government sector by LE 2.4 billion worth or 10.0 percent.
- 80 - The relative distribution of loans by
economic activity indicated that the manufacturing sector was the major recipient of loans in local and foreign currencies, with a share of 36.1 percent of both at the end of June 2011. The services sector came next with 27.2 percent, followed by the unclassified sectors (including the household sector) with 24.7 percent, the trade sector (10.1 percent), and agriculture (1.9 percent).
At the end of June 2011, loans and advances by maturity (excluding discounts) registered LE 471.3 billion, with a rise of LE 7.4 billion or 1.6 percent during the reporting year. The increase was an outcome of the rise in long-term loans (more than one year) by LE 23.1 billion or 10.0 percent, and the decline in short-term loans (up to one year) by LE 15.7 billion or 6.8 percent. The rise in long-term loans manifested the growth of loans in local currency by LE 17.6 billion and of foreign currencies by the equivalent of LE 5.5 billion. In the meantime, the retreat in short-term loans was caused by the fall of loans in foreign currencies by LE 11.7 billion worth, and in local currency by LE 4.0 billion.
Credit Facilities by Economic Activity End of June 2011
0
50
100
150
200
Agricu
lture
Manufac
turing
Trade
Service
s
Unclass
ified
LE bn
Local Currency Foreign Currencies
Loans & Advances by Banks (Excluding Discounts)End of June
0
20
40
60
80
100
120
140
160
180
200
2010 2011 2010 2011
One Year or Less Over One Year
LE bn
Local Currency Foreign Currencies
- 81 -
3- Non-Banking Financial Sector* 3/1- Stock Market
In FY 2010/2011, progress has been made with the efforts to strengthen
supervision over non-banking financial markets and protect dealers’ rights. To this end, the EFSA proposed an amendment of certain provisions of the Executive Regulations of the Capital Market Law No. 95 of 1992, to re-regulate mutual funds, in accordance with the international best practices. The amendments focused on shortcutting the procedures of establishing a fund to just one step; and obliging management services companies to seek the assistance of professional asset appraisers. The EFSA also issued the principle standards for professional performance to ensure the integrity and independence of the companies licensed to act as financial consultants and render appraisal services. The proposed standards include the following: (a) no company shall be entitled to practice the activity of financial consultancy on securities without obtaining a practice-precedent license from the EFSA; (b) the company shall prepare a general guideline describing the procedures followed thereby for rendering financial consultancy; (c) the company, in the course of dealing with customers, shall avoid granting privileges, incentives or information to certain customers and denying the same to the others; (d) the company shall set an internal control system preventing analysts from carrying out any appraisals with false or misleading results; (e) the company shall make sure that no common interest, or conflict of interests, may exist between the company and the applicant or the appraised company; and (f) the company shall immediately disclose to the EFSA any suspicion of conflict of interests between the company and the appraised company or any of its affiliates.
A number of laws and legislations regulating the capital market were revised
during the reporting year and amendments were made to the listing and disclosure rules, as the EFSA announced the regulations governing the application of Article (16) of the rules of listing and delisting of securities on the Egyptian Exchange. The regulations state that any company practicing activity in the market has to provide the EFSA and the EGX with a briefing of the minutes of its board of directors’ meetings, prior to the first trading session following such meetings, in case of the occurrence of a material event that should be disclosed, without prejudice to the confidentiality of the company’s business. Source: EFSA - monthly reports of the EGX.*
- 82 -
Aware of the importance of microfinance companies as a key ingredient of financial markets, the EFSA proposed a draft to regulate their activities and set controls for the selection of borrowers and monitoring and collection of loans; the permissible financial services and operational activities; rules of ownership and governance, and principles for the protection of the entities operating in this field according to the international best practices.
To protect the interests of brokers, Ministerial Decree No. 345 was issued on 10
March 2011 to amend some provisions of the Executive Regulations of the Capital Market Law regarding modifying the percentages of buying securities on margin. Accordingly, the liabilities percentage that must be reduced by a debtor, either by cash payments or by collaterals, was adjusted to be in excess of 70% (rather than 60%), at the time of the financial re-evaluation of stocks purchased on margin at the end of each business day, according to their market value. The customer's liabilities percentage of 70 percent that necessitates taking procedures to sell his shares and liquidate his warranties, was also modified to be 80% of the market value of securities.
The Ministerial Decree No. 355 was issued on 13 March 2011, amending some
provisions of the Decree establishing a fund for safeguarding securities dealers against non-commercial risks arising from exceptional circumstances and emergencies. By virtue of this amendment, the fund may form a portfolio (limited to 10% of its resources) to face any slump in the prices of the securities listed on the EGX, by purchasing securities to strike some balance between supply and demand in the market, yet without detriment to the fund’s ability to provide adequate liquidity as may be required to meet any compensation requests. The fund may also step in, in exceptional emergencies, to provide interest bearing loans to its members, to support their market activities, with a maximum limit of 20 percent of the fund’s financial resources, according to the rules to be set by the fund's board of directors and approved by EFSA.
The EGX benchmark index (EGX 30) fell by 10.9 percent in FY 2010/2011, recording 5373.0 points at end of June 2011. Similarly, the CMA's index moved down by 36.0 percent, posting 850.5 points at end of June 2011 due to the disruptive effects of the Revolution. However, EGX 70 (comprises small and medium companies) and EGX 100 inched up by 19.3 percent and 7.1 percent, respectively, registering 629.6 points and 972.9 points at end of June 2011.
- 83 - The third quarter of FY 2010/2011 (January/March) witnessed the closure of the
Egyptian Exchange from 28 January to 22 March 2011 (38 consecutive trading sessions) amid the unprecedented events attending the 25 January Revolution. Trading over the counter was also suspended till 28 March, following the sharp decline of 16 percent in the benchmark index (EGX 30) on 26 and 27 January, closing at 5646.5 points (against 6723.2 points before the outbreak of the events). On the first day of the resumption of trading (23 March), the index lost 23.5 percent as compared with its pre-revolution level, registering the third daily record low since its launch on 2 February 2003. Such a downtrend reflected enormous sales by investors triggered by worries about further losses.
In this setting, the EFSA took a number of prudential actions and measures to
guarantee the maximum protection of investors' rights. In the forefront, came the decision of reducing the price limits to 10%. Also, circuit breakers to EGX 100 index were introduced, whereby trading would be suspended for half an hour if a drop of 5% occurs in the index value and, for a period to be determined by the EGX chairman, in case of a 10 percent drop. Moreover, buying and selling shall be stopped in the same session. This is in addition to a number of measures concerning the pre-trading disclosure levels, as listed companies were required to update the disclosure of their operational, financial and administrative status. Accordingly, trading on the EGX of non-complying companies will be halted.
CMA & EGX 30 Indices
3001300230033004300530063007300
Jun.2
009 Ju
l.Aug
. Sep
t.Oct.
Nov.
Dec.
Jan.
2010 Feb
.Mar. Apr. May
.Ju
n. Jul.
Aug.Sep
t. Oct.
Nov
. Dec
.
Jan.
2011 Feb
.Mar. Apr. May
.Ju
n .
Point
CMA EGX 30
The Egyptian Exchange was
closed in the wake of the Revolution of 25th
of January
- 84 - Sectoral Indicators
The performance of traded-on sectors varied during FY 2010/2011. Healthcare and pharmaceuticals outperformed the other sectors, with a rise of 19.5 percent, followed by construction and building materials (13.4 percent), and chemicals (9.3 percent). In contrast, the basic resources recorded the sharpest decline (37.5 percent), followed by travel and recreation (32.3%), real estate (27.7%), and non-banking financial services (19.8).
As for the primary market, the number of new issues approved by EFSA
during this year reached 2654, at a total value of LE 44.6 billion (against 3426, at a total value of LE 154.3 billion a year earlier). Issues for new incorporations reached 1662 in number (62.6 percent of total issues), at a value of LE 8.5 billion. The number of issues for capital increases reached 992, totaling LE 36.1 billion (81.0 percent of total issues).
Change in the Sectoral Indicators during the FY 2010/2011
9.3
19.5
13.4
5.2
5.1
-8.4
-10.4
-16.3
-19.8
-27.7
-32.3
-37.5
-50.0-40.0-30.0-20.0-10.00.010.020.030.0
Basic Resources
Travel & Recreation
Real Estates
Financial Services (Excl. Banks)
Telecommunications
Industrial Goods & Services
Banks
Food & Beverages
Personal & Household products
Chemicals
Construction & Building Materials
Healthcare and Pharmaceuticals
(%)
- 85 -
The listing activity on the EGX showed that the number of listed companies declined to 211 at end of June 2011, from 215 at end of June 2010. The market capitalization of those companies decreased by 2.5 percent to LE 399.8 billion, because of the fall in the prices of most traded shares on the EGX on the back of the Revolution.
The value of issued and listed bonds surged by LE 53.2 billion or 31.0 percent in the year under review, posting LE 224.8 billion at end of June 2011, due to the rise of LE 47.0 billion in the value of Egyptian treasury bonds (primary dealers), to register LE 206.8 billion or 92.0 percent of the total value of listed bonds at end of June 2011. Moreover, corporate bonds scaled up by LE 1.3 billion, to LE 6.7 billion. Also, the listed bonds of the New Urban Communities Authority (issued to raise finance for infrastructure projects) amounted to LE 5.0 billion at end of the year, down by LE 5.0 billion below their issued value (LE 10 billion), as a consequence of the amortization of the second tranche of the first and second issues of fixed-rate bonds at their maturity dates in April and June 2011.
As for the secondary market, the relevant three indicators (number of
transactions, and number and value of traded securities) pointed to a decline in the reporting year, relative to the past year, on the back of the events experienced by Egypt. The number of transactions dropped by 4956 thousand or 40.9 percent, and so did the number of traded securities (shares and bonds) by 9644 million or 29.3 percent, compared with the previous FY, posting 23236 million papers. Likewise, their value decreased by LE 240.7 billion or 54.5 percent, to LE 200.6 billion.
Share transactions accounted for the bulk of trading on the EGX during FY
2010/2011 (77.5 percent of total transactions, against 89.1 percent a year earlier). In the meantime, trading in bonds represented 22.5 percent of the total (against 10.9 percent).
Turning to the market of small and medium enterprises (NILEX), the number of listed companies reached 18 at end of June 2011. The market capitalization of listed shares on NILEX amounted to some one billion Egyptian pounds at end of June 2011 (against LE 0.4 billion at end of June 2010). Traded securities reached 22 million papers through 8224 transactions, with a total value of LE 228 million during FY 2010/2011.
- 86 -
Trading in Securities
FY 2007/2008 2008/2009 2009/2010 2010/2011
No. of Transactions (000) 12974 13169 12116 7160 A- Shares, bonds and mutual funds’
certificates (listed)
12374
12123
11383
7068 B- Shares, bonds and mutual funds’
certificates (unlisted)
600
1046
733
84 C- Small and Medium Enterprises
Market (NILEX)* -
-
-
8
No. of Traded Securities (mn) 23615 31956 32880 23236 A- Shares, bonds and mutual funds’
certificates (listed)
19441
25455
25362
21048 B- Shares, bonds and mutual funds’
certificates (unlisted)
4174
6501
7518
2166 C- Small and Medium Enterprises
Market (NILEX)* -
-
-
22
Value of Transactions (LE mn) 610591 319682 441315 200578 A- Shares, bonds and mutual funds’
certificates (listed) 544129 278383 312141 182890 B- Shares, bonds and mutual funds’
certificates (unlisted)
66462
41299
129174
17460 C- Small and Medium Enterprises
Market (NILEX)* -
-
-
228
Source: EFSA- monthly reports of the EGX. *Trading on NILEX started on June 3, 2010. Foreigners' Transactions
Foreigners' transactions on the EGX stepped down by 31.6 percent during FY
2010/2011, below the previous FY, scoring LE 88.7 billion (against LE 129.7 billion). Their transactions resulted in net purchases of LE 2.0 billion (against LE 5.6 billion a year earlier).
Foreign Investors' Transactions during the FY
1
16
31
46
61
76
91
2009/2010 2010/2011
LE bn
PurchasesSalesNet
- 87 - Egyptian investors' trading on the EGX accounted for 66 percent of total
transactions in FY 2010/2011. On the other hand, dealings of foreigners (non-Arabs) represented 27 percent of total transactions, while those of Arab investors made up merely 7 percent.
Egyptian, Foreign, and Arab Investors' Transactions in the Stock Market
FY 2010/2011
Foreigners (excluding
Arabs) 27%
Arabs 7%
Egyptians66%
- 88 -
4- Public Finance and Domestic Public Debt
4/1- Consolidated Fiscal Operations of the General Government
Affected by the events and associated repercussions of the revolution, government expenditures rose in FY 2010/2011 by 7.1 percent to LE 392.1 billion (28.5 percent of GDP), while revenues declined by 3.2 percent to LE 259.6 billion (18.8 percent of GDP). Accordingly, the overall budget deficit widened by 33.0 percent to register LE 130.4 billion, constituting 9.5 percent of GDP (against some LE 98.0 billion or 8.1 percent of GDP a year earlier). The deficit (LE 130.4 billion) is a 19.5 percent above the estimated figure for the whole FY.
To address the consequences of the Egyptian revolution, the government took a
number of measures regarding both expenditures and revenues. On the expenditures side, the government established a compensation fund for individuals and small and micro enterprises that were negatively affected by the events; appointed, on a permanent basis, some of the temporary-contract employees; increased the number of families eligible for the social solidarity pension; disbursed exceptional pensions and compensations for martyrs' families; and established an additional budget appropriation of LE 10.0 billion to satisfy the basic requirements of subsidizing food commodities during the year under review. On the revenues side, the most important measures were: allowing payment in installments of sales taxes in Jan. and Feb. to provide the required liquidity for projects; and the prompt release of merchandise imports without paying the customs duties mandated for Jan. and Feb. 2011 (to be paid later on) to ensure the availability of staple food items. In addition, the government exempted those with overdue insurance premiums from delay fines.
0.05.0
10.015.020.025.030.035.040.0
2006/2007 2007/2008 2008/2009 2009/2010 2010/2011
Revenues Expenditures Deficit
Ratios of Expenditures, Revenues & Overall Deficit / GDP
%
- 89 -
Hereunder is a follow-up of the execution of the consolidated fiscal operations of
the general government in FY 2010/2011, according to the preliminary actual data of the Ministry of Finance: 4/1/1- Budget Sector
(Administrative System - Local Administration - Service Authorities) Due to the repercussions of the 25th January Revolution, public revenues shrank by some LE 8.5 billion or 3.2 percent in the reporting year, to record LE 259.6 billion (18.8 percent of GDP).
The LE 12.8 billion retreat in the property income of EGPC, and in other
miscellaneous revenues was principally responsible for the decline, as property income of SCA and CBE increased. Other factors at work were the drop in customs duties (by LE 0.8 billion), in sale proceeds of goods and services and in investments finance (by LE 2.1 billion each), and in some other revenues (by LE 10.3 billion), in addition to the contraction in external grants (by LE 2.6 billion worth).
The Relative Structure of Tax Revenues of the Budget Sector 2010/2011
Taxes on International Trade 7.2%
Other Taxes 6.4%
Taxes on Goods & Services 39.6%
Taxes on Income 46.8%
Total Revenues,Tax Revenues & Property Income
0 50 100 150 200 250 300
2006/2007
2007/2008
2008/2009
2009/2010
2010/2011
Total Revenues Tax Revenues Property Income
(LE bn)
- 90 -
The decline would have been larger but for the rise in collected taxes on incomes and profits by LE 13.0 billion or 17.0 percent, on goods and services by LE 8.8 billion or 13.1 percent, and on property by LE 363 million or 4.1 percent.
Consolidated Fiscal Operations of the General Government
(Budget Sector) (Public Revenues)
(LE bn)2009/2010 2010/2011
Change Change
Preliminary Actual % (%)
Preliminary Actual % (%)
Total Revenues 268.1 100.0 -5.1 259.6 100.0 -3.2 Tax Revenues 170.5 63.6 4.5 191.6 73.8 12.4 Taxes on Income and Profits 76.6 28.6 -3.1 89.6 34.5 17.0 From EGPC 32.2 12.0 -5.7 34.3 13.2 6.6 From SCA 9.4 3.5 -9.1 10.9 4.2 15.4 From CBE 0.0 0.0 0.0 0.0 Other entities 18.6 7.0 -8.3 25.3 9.8 36.4 Payable by Individuals 16.4 6.1 14.8 19.1 7.3 16.3 Taxes on Property 8.8 3.3 122.4 9.1 3.5 4.1 Taxes on Goods and Services 67.1 25.0 7.1 75.9 29.2 13.1 Taxes on International Trade (Customs) 14.7 5.5 4.3 13.9 5.4 -5.7 Other Taxes 3.3 1.2 -4.5 3.1 1.2 -6.3 Grants 4.3 1.6 -45.7 1.7 0.7 -60.2 Current 2.3 0.9 -63.7 0.2 0.1 -89.8 Capital 2.0 0.7 31.6 1.5 0.6 -25.1 Other Revenues 93.3 34.8 -16.2 66.3 25.5 -29.0 Property Income 54.6 20.4 2.2 41.8 16.1 -23.4 From EGPC 25.6 9.5 18.1 21.0 8.1 -17.8 From SCA 12.7 4.8 -6.2 15.2 5.9 19.8 From CBE 0.2 0.1 0.5 0.2 142.9 From economic authorities 1.4 0.5 14.9 1.3 0.5 -10.1 From companies 3.3 1.2 -16.0 3.3 1.2 -0.2 Others (from EGPC and TML) 4.5 1.7 3.9 -2.9 -1.1 -164.3 Others 6.9 2.6 -21.1 3.4 1.3 -50.4 Selling Proceeds of Goods and Services 17.2 6.4 6.1 15.2 5.8 -11.9 Financial Investments 8.9 3.3 13.0 6.8 2.6 -23.9 Others 12.6 4.7 -62.7 2.5 1.0 -79.8 Source: Ministry of Finance. Percentages are calculated in terms of LE million.
- 91 -
As indicated by preliminary actual figures, expenditures increased by LE 26.1
billion or 7.1 percent above the previous fiscal year, registering LE 392.1 billion or 28.5 percent of GDP.
The increase stemmed mainly from subsidies that rose by LE 17.5 billion or 18.7
percent over the previous fiscal year, to stand at LE 111.0 billion, absorbing some 42.8 percent of total revenues. Wages and compensations of employees augmented by LE 9.7 billion or 11.4 percent to LE 95.1 billion, draining 36.6 percent of public revenues and constituting about 26.8 percent of current government spending.
Interest payments on public debt -domestic and external- accelerated by LE 8.7
billion or 12.1 percent to LE 81.1 billion, absorbing 31.2 percent of public revenues and reflecting as such the high burden of debt service. However, some items decreased, mainly investments of infrastructure projects that markedly fell by LE 10.4 billion or 21.5 percent to LE 38.0 billion, as the construction of some projects has been suspended since the outbreak of the revolution. In addition, purchases of goods and services went down by LE 4.3 billion or 15.2 percent under the current circumstances.
The Relative Structure of the Budget Sector Expenditures 2010/2011
Wages & Compensations of Employees
24.2%
Investments 9.7%
Interests 20.7%
Subsidies , Grants &
Social Benefits 31.3%
Purchases of Goods &
Services 6.1%
Other Expenditures
8.0%
- 92 -
Consolidated Fiscal Operations of the General Government (Budget Sector)
(Public Expenditures) (LE bn)
2009/2010 2010/2011 Change Change
Actual % (%) Preliminary
Actual % (%) Total Expenditures 366.0 100.0 4.1 392.1 100.0 7.1 Wages & Compensations of Employees 85.4 23.3 12.1 95.1 24.2 11.4 Salaries and wages 70.3 19.2 12.2 77.7 19.8 10.4 Social contributions 7.9 2.1 8.9 9.1 2.3 15.9 Other 7.2 2.0 14.6 8.3 2.1 15.9 Purchases of Goods and Services 28.0 7.7 11.9 23.8 6.1 -15.2 Goods 12.0 3.3 4.9 9.7 2.5 -18.7 Services 11.4 3.1 16.7 10.4 2.6 -9.4 Other 4.6 1.3 20.4 3.7 1.0 -20.8 Interests 72.3 19.8 37.0 81.1 20.7 12.1 Foreign interests 2.8 0.8 -21.1 3.4 0.9 20.3 Domestic interests: 69.5 19.0 41.2 77.7 19.8 11.8 To NIB and SIFs 19.0 5.2 2.3 19.2 4.9 0.5 To others 50.5 13.8 64.9 58.5 14.9 16.0 Subsidies, Grants and Social Benefits 103.0 28.1 -18.9 122.8 31.3 19.3 Subsidies 93.6 25.6 -0.3 111.0 28.3 18.7 To GASC 16.8 4.6 -20.2 32.7 8.3 94.7 To EGPC 66.6 18.2 6.1 67.7 17.3 1.7 To Others 10.2 2.8 1.7 10.6 2.7 3.6 Grants 4.4 1.2 4.0 5.3 1.4 21.3 Social Benefits 4.5 1.2 -84.4 6.0 1.5 34.6 Contribution to SIFs 2.4 0.7 -91.0 3.4 0.9 43.3 Other 2.1 0.5 9.5 2.6 0.6 24.6 Other 0.5 0.1 91.5 0.5 0.1 -14.2 Other Expenditures 28.9 7.9 7.0 31.4 8.0 8.5 Defense 23.5 6.4 5.3 26.5 6.8 12.9 Other 5.4 1.5 14.9 4.9 1.2 -10.4 Purchases of Non Financial Assets (Investments) 48.4 13.2 11.3 37.9 9.7 -21.5 Fixed assets 39.2 10.7 13.1 33.2 8.5 -15.1 Others 9.2 2.5 4.2 4.7 1.2 -48.8 Source: Ministry of Finance. Percentages are calculated in terms of LE million.
- 93 -
Against this background, the budget showed a cash deficit of LE 132.5 billion or
9.6 percent of GDP. By adding the net acquisition of financial assets (a negative LE 2.1 billion) to the cash deficit, the overall deficit would post LE 130.4 billion or 9.5 percent of GDP (against LE 98.0 billion or 8.1 percent of GDP a year earlier). Domestic finance sources (especially banks’ subscriptions for TBs in the amount of LE 74.0 billion, representing 56.4 percent of available finance) were mainly used to finance the overall budget deficit, along with some miscellaneous repayments. External sources provided no more than LE 5.0 billion worth.
4/1/2- Budget Sector, NIB and SIFs
When adding the fiscal operations of the NIB and SIFs to those of the budget
sector, collected revenues would surge by LE 36.7 billion to LE 296.3 billion (21.5 percent of GDP). Likewise, public expenditures would rise by LE 38.5 billion, to LE 430.6 billion (31.3 percent of GDP).
Accordingly, the cash deficit of the consolidated fiscal operations of the general government reached LE 134.3 billion in the reporting year. By adding the net acquisition of financial assets (a negative LE 4.3 billion) to that deficit, the overall deficit would reach LE 130.0 billion or 9.4 percent of GDP.
Cash Deficit & Overall Deficit /GDP
6.6
7.7
7.5
6.9
8.2
6.4
9.7
9.4
6.0
7.0
8.0
9.0
10.0
2007/2008 2008/2009 2009/2010 2010/2011
Cash Deficit Overall Deficit
%
- 94 -
Summary of Consolidated Fiscal Operations of the General Government (Budget Sector, NIB and SIFs)
(LE bn) 2009/2010 2010/2011
Budget Sector %
Consolidated Fiscal
Operations of the General Government %
Budget Sector
%
Consolidated Fiscal
Operations of the General Government %
Total Revenues 268.1 303.4 259.6 296.3 Total Expenditures 366.0 396.8 392.1 430.6 Cash Deficit 97.9 93.4 132.5 134.3 Net Acquisition of Financial Assets 0.1 5.5 -2.1 -4.3 Overall Deficit 98.0 98.9 130.4 130.0 Financing Sources 98.0 100.0 98.9 100.0 130.4 100.0 130.0 100.0 Domestic Financing 101.5 103.5 102.4 103.6 144.2 110.6 135.6 104.2 Banking Financing 40.3 41.1 39.4 39.8 100.0 76.7 97.6 75.1 CBE 11.6 11.8 11.6 11.7 24.6 18.8 24.5 18.9 Other banks 28.7 29.3 27.8 28.1 75.4 57.9 73.1 56.2 Non-Banking Financing 61.2 62.4 63.0 63.8 44.2 33.9 38.0 29.1 NIB 3.7 3.7 0.0 0.0 1.2 0.9 0.0 0.0 SIFs 5.2 5.3 0.0 0.0 11.1 8.5 0.0 0.0 Other 53.0 54.1 53.0 53.6 31.0 23.8 31.0 23.8 NIB borrowing 0.0 0.0 10.7 10.8 0.0 0.0 6.1 4.6 Special accounts for economic authorities -0.7 -0.7 -0.7 -0.6 0.9 0.7 0.9 0.7 Blocked Account Used in Amortizing Part of CBE Bonds 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 External Borrowing 2.5 2.5 2.5 2.5 5.0 3.8 5.0 3.9 Arrears 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Others, of which: 0.3 0.4 0.3 0.3 -0.2 -0.1 8.0 6.2 Special accounts for budget entities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Financing Effects for Eliminations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Exchange Rate Revaluation 1.3 1.4 1.3 1.3 3.9 3.0 3.9 3.0 Net Privatization Proceeds 0.4 0.4 0.4 0.4 0.0 0.0 0.0 0.0 Difference between Treasury Bills Face Value & Present Value -0.2 -0.2 -0.2 -0.2 -7.4 -5.7 -7.4 -5.7 Foreign Debt Reclassification Differences and Related FX Differences 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Discrepancy -7.8 -8.0 -7.8 -7.9 -15.1 -11.6 -15.1 -11.6 Source: Ministry of Finance. Percentages are calculated in terms of LE million.
The overall deficit of the consolidated fiscal operations of the general government was mainly financed from local sources, while external sources provided no more than LE 5.0 billion worth.
- 95 - 4/2- Domestic Public Debt
During FY 2010/2011, domestic public debt stood at LE 1044.9 billion at the end
of June 2011 or 76.2 percent of GDP (at current market prices), up by LE 156.2 billion or 17.6 percent. It is to be noted that domestic public debt consists of the sum of net government debt, public economic authorities' debt, and debt of the National Investment Bank (minus intra-debt of public economic authorities and the government to the NIB).
4/2/1- Debt of the Government (Net)
The government's domestic debt (net basis) reached LE 808.1 billion or 58.9
percent of GDP at end of June 2011, up by LE 144.3 billion or 21.7 percent during FY 2010/2011. The rise was a twofold effect of the LE 137.7 billion increase in the balances of treasury bonds and bills, and the LE 4.6 billion decrease in the net credit position of government balances at the banking system (due to the increase in government loans and deposits by LE 19.2 billion and LE 14.6 billion, respectively). Another factor at work was borrowing from other local entities in the amount of LE 2.0 billion.
808.1
66.3
238.2
-67.7
1044.9
-200 0 200 400 600 800 1000 1200
Net Domestic Debt ofGovernment
Net debt of EconomicAuthorities
NIB Debt (Net)
Intra-Debt
Gross Domestic Debt
Gross Domestic Debt at End of June 2011 (LE bn)
- 96 -
Domestic Debt of the Government (Net)
June 2010 June 2011 Balances at End of
Value % Value %
Change (+) -
2010/2011 Domestic Government Debt (Net) 663.8 100.0 808.1 100.0 144.3 - Balances of Bonds & Bills* 779.2 117.4 916.9 113.5 137.7
• Notes and bonds, of which: 513.1 77.3 560.8 69.4 47.7 Tradable on exchanges 169.7 25.6 218.5 27.0 48.8
• Treasury bills 266.1 40.1 356.1 44.1 90.0 - Borrowing from Other Entities - - 2.0 0.2 2.0 - Facilities from SIFs 2.4 0.3 2.4 0.3 - - Net Balances at the Banking System -117.8 17.7 -113.2 -14.0 4.6
• Credit facilities 26.8 4.0 46.0 5.7 19.2 • Deposits 144.6 21.8 159.2 19.7 14.6
Net domestic government debt/GDP (%) 55.0 58.9 Source: Ministry of Finance, CBE and NIB. Ratios are calculated in terms of LE million. * Including treasury bonds; housing bonds; bonds denominated in foreign currencies with public commercial
banks; the 5 percent ratio retained from profits of corporations subject to Law No. 97 of 1983 for the purchase of government bonds; and the holdings of resident financial institutions (banking system and insurance sector) of bonds floated abroad; and the SIFs bonds against transferring NIB debt to the Public Treasury.
The increase of LE 137.7 billion in the balances of government bonds and bills
was an outcome of the following developments: A- The rise in the balance of government bonds by LE 47.7 billion, to LE 560.8 billion
at the end of June 2011, as a result of: 1- The LE 47.0 billion increase in the Egyptian treasury bonds, because of the
following: • The issuance of treasury bonds at a value of LE 49.5 billion in July/December
2010, and LE 7.5 billion worth in January/March 2011.
• The redemption of Egyptian treasury bonds at a value of LE 10.0 billion (LE 6.0 billion falling due in July/December 2010, and LE 4.0 billion due in February 2011).
2- The issuance of a 10-year public treasury bond (non-interest bearing) at a value of
LE 9.1 billion on 1 July 2010.
3- The issuance of a treasury bond for the benefit of the Social Insurance Fund of Civil Servants, at a value of LE 1.8 billion on 30 June 2011.
- 97 - 4- The LE 1.7 billion rise in the net balance of bonds tradable abroad (denominated in
US dollar and LE). 5- The amortization of foreign currency bonds at public commercial banks at a value of
US$ 2090.2 million or LE 11.9 billion worth at the end of June 2010. B- The LE 90.0 billion rise in the outstanding balance of public treasury bills, to LE
356.1 billion at the end June 2011, compared with LE 266.1 billion at the end of June 2010.
4/2/2-Debt of Public Economic Authorities (Net)
In FY 2010/2011, net debt of the public economic authorities went down by
LE 1.5 billion to LE 66.3 billion at end of June 2011. The fall was traceable to the decrease in their net borrowing from the banking system by LE 2.2 billion (because of the rise in claims thereon and in their deposits by LE 7.9 billion and LE 10.1 billion, respectively), in addition to the rise in their borrowing from the National Investment Bank (NIB) by LE 0.7 billion.
4/2/3- Debt of the National Investment Bank (Net)
Net debt of NIB (including intra-debt) reached some LE 238.2 billion at the end
of June 2011, up by LE 16.0 billion in the reporting year. The rise was a twofold effect of the expansion in the NIB's total invested resources by LE 13.1 billion to LE 240.9 billion at the end of June 2011, and the decline in its deposits at the banking system by LE 2.9 billion.
Net Domestic Debt of Government
-200
0
200
400
600
800
1000
June 2009 June 2010 June 2011 0
10
20
30
40
50
60
70
Treasury BillsBonds & Other Credit FacilitiesNet Government Balances with the Banking SystemRatio of Government Debt/GDP
%LE bn
- 98 -
4/2/4- Intra-Debt
Intra-debt of the public economic authorities and the government to NIB reached some LE 67.7 billion at the end of June 2011, against LE 65.1 billion at the end of June 2010. Loans extended by NIB to these authorities registered about LE 52.2 billion, with an increase of LE 0.7 billion in the reporting year, while the NIB's investments in government securities (bills and bonds) amounted to LE 15.5 billion, up by LE 1.9 billion.
4/2/5- Domestic Public Debt Service
Domestic debt service in the state budget posted LE 104.6 billion in FY
2010/2011, up by LE 17.1 billion over the preceding year. The increase was largely the result of the rise in interest payments by LE 12.2 billion to LE 81.7 billion, and in principal repayments by LE 4.9 billion to LE 22.9 billion. According to the state budget, the ratios of domestic debt service to GDP, and to public revenues climbed to 7.6 percent and 40.3 percent, respectively (from 7.3 percent and 32.7 percent).
Resources of the NIB at End of June 2011 (LE bn)
Dollar Development
Bonds & Others 2.9
Social Insurance Funds
62.6
Proceeds of Investment Certificates
& Accumulated Interest 103.4
Post Office Saving Account
72.0
Loans to Holding Companies & Affiliate Units, Concessional
Lending & Others 170.5
Inv estment in Treasury Bills &
Bonds 15.5
Loans to Economic Authorities
52.2
Deposits with the Banking System
2.7
Uses of the NIB at End of June 2011(LE bn)
- 99 -
5- External Transactions 5/1- Foreign Exchange Market
The CBE kept up its successful management of the foreign exchange market
through the interbank dollar system. Having succeeded earlier in weathering the repercussions of the global financial crisis, the market proved for the second time resilient and efficient enough in addressing post-Revolution economic crisis, which is to blame for the marked decline in foreign investments in the second half of the reporting year. In other words, the prudent management of the market has been instrumental in shielding the LE exchange rate from any sharp fluctuations. In this setting, the weighted average of the US dollar interbank rate posted LE 5.9690 at the end of June 2011 (against LE 5.8496 at the end of January) with a slight decline of 2.0 percent. Subsequent to the reporting year, the US dollar exchange rate posted LE 6.0319 at end of December 2011. That indisputably accentuated investors’ and dealers’ confidence in the efficiency and credibility of the foreign exchange market, thus enhancing market stability and staving off any fears or disruptions, besides cushioning the Egyptian economy against the negative effects of the crisis and strengthening its prospects for recovery. Considering FY 2010/2011 as a whole, a depreciation of 4.6 percent was noted in the value of the Egyptian pound.
The events witnessed in the second half of the year bore down on net
international reserves at the CBE, causing them to drop by about US$ 8.6 billion or 24.6 percent, to end the year at US$ 26.6 billion, against US$ 36.0 billion at end of Dec. 2010 and US$ 35.2 billion at end of June 2010 (a decline of about US$ 9.4 billion or 26.2 percent was observed in Jan./June 2011). The drain on NIR was sparked by the revolutionary events in Egypt, which took their toll on the receipts of foreign exchange. On the one hand, tourism revenues dwindled by 47.5 percent in the second half of the FY, compared with the first. On the other hand, FDI registered, for the first time, a negative record low of US$ 65 million, while portfolio investment posted a net outflow of US$ 7.1 billion. Notwithstanding their contraction, NIRs managed to cover 6.3 months of merchandise imports at end of June 2011. At the time of preparing this Review, NIRs continued to show a downtrend, standing at US$ 18.1 billion at end of December 2011 (equivalent to 3.7 months of merchandise imports).
- 100 -
5/2 - Balance of Payments∗
In the year under review, Egypt's transactions with the external world revealed a BOP overall deficit of US$ 9.8 billion (against an overall surplus of US$ 3.4 billion), leading as a consequence to the decline in NIR at the CBE.
∗ Based on the IMF's BOP Manual, Fifth Edition, Sept. 1993.
Overall Balance
0.01
-4.3
0.6
-6.1
2.1
0.6 0.5 0.2
-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009/2010 2010/2011
US$ bn
Net International Reserves & Months of Merchandise Imports (End of June)
06
1218243036
2005 2006 2007 2008 2009 2010 2011
(US$ bn)
0.02.04.06.08.010.012.0
NIR NIR/Months of Merchandise Imports
( Months )
Merchandise Exports & Imports
-60.0
-50.0
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
2008/2009 2009/2010 2010/2011
US$ bn
Petroleum Exports Non - Petroleum ExportsNon - Petroleum Imports Petroleum ImportsExports Imports
- 101 - Data indicated that the BOP recorded an overall deficit of US$ 10.3 billion in the
second half of the year (Jan./June 2011), against an overall surplus of US$ 571.7 million in the first half (July/Dec. 2010), in the wake of the events in Egypt and other Arab countries that weighed heavily on tourism revenues and foreign investment flows to Egypt.
The current account deficit lessened by 35.9 percent, posting US$ 2.8 billion
(against US$ 4.3 billion in the previous FY). Meanwhile, the capital and financial account unfolded a net outflow of US$ 4.8 billion (against a net inflow of US$ 8.3 billion).
Hereunder is an overview of the BOP performance in FY 2010/2011, compared to the previous FY.
5/2/1- Trade Balance
The trade deficit narrowed by 5.3 percent to US$ 23.8 billion (against US$ 25.1 billion), the decline came on the back of the 13.1 percent rise in merchandise exports to US$ 27.0 billion (oil exports increased by 18.3 percent and non-oil exports by 9.1 percent). Merchandise imports also edged up by 3.6 percent to US$ 50.8 billion (oil imports rose by 15.2 percent and non-oil imports by 2.3 percents). 5/3- External Trade
In FY 2010/2011, the volume of trade expanded by 6.7 percent, registering
US$ 77.8 billion (against US$ 72.9 billion a year earlier). The uptrend reflected the 13.1 percent increase in exports to US$ 27.0 billion against 23.9 billion, as oil exports (45 percent of total exports) rose by 18.3 percent, and also non-oil exports (55 percent of total exports) inched up by 9.1 percent. On the other hand, import payments increased as well by 3.6 percent, to US$ 50.8 billion (against US$ 49.0 billion), reflecting the rise of 15.2 percent in oil imports (11.7 percent of total imports) and of 2.3 percent in non-oil imports (88.3 percent of the total).
Proceeds of Merchandise Exports by Degree of Processing
0.02.04.06.08.0
10.012.014.0
Fuel, MineralOils &
Products
Raw Materials Semi-f inishedgoods
Finishedgoods
US$ bn
2008/2009 2009/2010 2010/2011
- 102 - 5/3/1- Merchandise Export Proceeds by Degree of Processing
Reversing a two-year decrease
(US$ 25.2 billion in 2008/2009 and US$ 23.9 billion in 2009/2010), merchandise exports rose by 13.1 percent to US$ 27.0 billion in 2010/2011. Exports of semi-finished goods scaled up by 28.1 percent, mineral fuels, oils and products by 18.5 percent, raw materials by 11.2 percent and finished goods by 7.7 percent.
The main contributors to the growth of export proceeds were crude oil and oil products (their world price hikes hovered around 35 percent on average during the year under review); together with fertilizers and cotton textiles.
5/3/2- Merchandise Import Payments by Degree of Use
Imports increased by 3.6 percent to US$ 50.8 billion in 2010/2011, in contrast to a decline that lasted for two years (US$ 50.3 billion in FY 2008/2009 and US$ 49.0 billion in 2009/2010). Imports of mineral fuels, oils and products rose by 21.9 percent, raw materials by 32.6 percent, investment goods by 4.0 percent and consumer goods by 0.2 percent. Conversely, imports of intermediate goods fell by 2.8 percent.
Payments for Merchandise Imports by Degree of Use
0.02.04.06.08.0
10.012.014.016.018.0
Fuel, MineralOils &
Products
Raw Materials IntermediateGoods
InvestmentGoods
ConsumerGoods
US$ bn
2008/2009 2009/2010 2010/2011
- 103 - 5/3/3 - Sectoral Distribution of Merchandise Transactions
The private sector contributed 64.4 percent of the total volume of trade in FY
2010/2011. The public sector came second with 25.8 percent, followed by the investment sector with 9.8 percent. A) Private Sector:
Its volume of trade grew by 6.2 percent to US$ 50.1 billion. The exports of this sector mounted by 10.1 percent, standing at US$ 12.5 billion (46.4 percent of total exports), against US$ 11.4 billion.
Likewise, the sector’s imports rose by 5.0 percent to US$ 37.5 billion (73.9
percent of total imports), against US$ 35.7 billion.
B) Public Sector:
The volume of trade of the public sector increased by 2.2 percent, to US$ 20.1 billion, in view of the rise in exports by 5.0 percent to US$ 11.4 billion (42.4 percent of total export proceeds), against US$ 10.9 billion. On the other hand, the imports of this sector declined by 1.4 percent to US$ 8.6 billion (17.0 percent of total imports) against US$ 8.8 billion.
The Volume of Trade of the Private Sector US$ 50.1 bn
Exports 25% Imports 75%
Mineral Fuels and Oils 3.1%
Raw Materials 10.9%
Intermediate Goods 35.8%
Investment Goods 21.7%
Consumer Goods 28.5%
Mineral Fuels and Oils 2.9%
Raw Materials 9.0%
Semi-Finished Goods 13.1%
Finished Goods 74.9%
- 104 -
C) Investment Sector:
The share of the investment sector in trade exchange climbed by 25.6 percent, to US$ 7.6 billion. This was an outcome of the rise of exports by 89.9 percent to US$ 3.0 billion (against US$ 1.6 billion), as well as the rise of its imports by 2.9 percent to US$ 4.6 billion.
The Volume of Trade of the Public Sector US$ 20.1 bn
Exports 57% Imports 43%
Mineral Fuels and Oils 94.3%
Raw Materials 1.1%
Semi-Finished Goods 1.4%
Finished Goods 2.9%
Mineral Fuels and Oils 37.3%
Raw Materials 27.5%
Intermediate Goods 10.5%
Investment Goods 13.7%
Consumer Goods 8.0%
- 105 -
5/3/4 - Geographical Distribution of Merchandise Transactions
The volume of trade between Egypt and the external world picked up by 6.7 percent, standing at US$ 77.8 billion. The volume of trade with all groups increased, except for the Russian Federation, the C.I.S countries, the United States, Australia and other countries and regions. The pickup in trade was owed to the government’s efforts to open new markets and increase its trade with the Arab, African and European countries. Consequently, the trade deficit between Egypt and the external world narrowed by 5.3 percent to US$ 23.8 billion during the reporting year (against US$ 25.1 billion). That was ascribed to the rise in the export proceeds by 13.1 percent to US$ 27 billion, thus exceeding the growth of 3.6 percent in import payments (US$ 50.8 billion).
Volume of Trade of the Investment Sector US$ 7.6 bn
Exports 39.5% Imports 60.5%
Mineral Fuels and Oils 47.8%
Raw Materials 5.3%
Semi-Finished Goods 9.4%
Finished Goods 37.5%
Mineral Fuels and Oils 5.8%
Raw Materials 19.1%
Intermediate Goods 31.7%
Investment Goods 24.2%
Consumer Goods 19.2%
Geographical Distribution of Foreign TradeFY 2010/2011
-20.0-10.0
0.010.020.030.0
EuropeanUnion
OtherEuropeancountries
RussianFederation &
C.I.S
United States Arabcountries
Asiancountries
(Non - Arab)
Af ricancountries
(Non - Arab)
Australia &other
countries
(US$ bn)
Exports Imports Volume of trade Trade balance
Volume of Trade US$ 77.8 bn
Oil & Products 23.2%
Foodstuffs 8.5%
Cereals 5.5%
Cotton & Textiles 5.9%
Exports 12.1 bn
Imports 5.9 bn
Exports 1.2 bn
Imports 5.4 bn
Imports 4.1 bn
Exports 0.2 bn
Exports 2.3 bn
Chemicals 9.7%Imports 4.7 bn
Exports 2.9 bn
Machinery & Electric Appliances 7.9% Imports 5.4 bn
Exports 0.8 bn
Base Metals & Products 9.3% Imports 5.1 bn
Exports 2.1 bn
Vehicles & Means of Transportation 8.1%
Other Goods 21.9%
Exports 0.7 bn
Imports 5.6 bn
Imports 12.3 bn
Exports 4.7 bn
Imports 2.3 bn
- 106 - 5/3/5- Breakdown of Trade by Main Commodities
The volume of trade of all merchandise groups stepped up, with the exception of
machinery and electric appliances. The following chart reveals the volume of trade of all merchandise groups and their respective shares in FY 2010/2011.
- 107 - 5/3/6 - Balance of Services and Transfers
A. Balance of Services
Services surplus declined by 23.8 percent, reaching US$ 7.9 billion in FY 2010/2011 (against US$ 10.3 billion a year earlier). The decrease was an outcome of the fall in services receipts by 7.2 percent and the rise in services payments by 5.8 percent.
- Services receipts decreased by 7.2 percent, to post US$ 21.9 billion (against US$
23.6 billion), as a result of the following developments: • Tourism revenues° dropped by 8.6 percent, to reach merely US$ 10.6 billion
(against US$ 11.6 billion) primarily due to the retreat in the number of tourist nights by 8.7 percent, to post 124.6 million nights (against 136.4 million nights). Analysis of tourism revenues in FY 2010/2011 shows that they plummeted by 47.5 percent in the second half of the year (January/June 2011) to US$ 3.6 billion from US$ 6.9 billion in the first half (July/December 2010), on the back of the recent events in Egypt.
• Investment income receipts rolled back by 49.5 percent, to reach merely US$ 418.8
million (against US$ 829.0 million) due to lower interest payments and dividends on bonds and securities.
• Government receipts went down by 46.0 percent to US$ 117.7 million (from US$
217.9 million) owing to the drop in other government receipts, expenses of foreign embassies in Egypt, the Arab League, and international institutions.
• Other services receipts dropped by 27.8 percent to only US$ 2.7 billion (against US$ 3.7 billion) because of the decrease in the invisible receipts of the oil sector, proceeds of oil investment services companies and receipts of construction and contracting services.
° Calculated on the basis of the number of tourist nights multiplied by average tourist spending per night.
- 108 - • Conversely, transportation receipts rose by 11.8 percent to US$ 8.1 billion (against
US$ 7.2 billion) driven by the increase in the Suez Canal earnings by 11.9 percent to US$ 5.1 billion (against US$ 4.5 billion), and higher receipts of Egyptian navigation companies.
It is noteworthy that despite the current events in Egypt and the Arab countries, the Suez Canal earnings remained broadly stable at US$ 1.2 billion in Q3, rising to US$ 1.3 billion in Q4 of the reporting year (against US$ 1.1 billion and US$ 1.2 billion, respectively, in the two corresponding periods a year earlier).
Developments of Travel & Suez Canal Receipts (Growth Rate)
11.4 14.3
-35.4-34.0
18.5
-1.6
1324.2
12.0 13.3
8.5
-24.0
-8.315.0 10.1 13.1
-40
-20
0
20
40
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009/2010 2010/2011
%
Travel Suez Canal
Service Receipts Items as a Percentage of Total Service Receipts 2010/2011
Travel48.4%
Investment Income1.9%
Government Receipts
0.5%
Other Receipts12.3%
Transportation36.9%
- 109 - - Services payments increased by 5.8 percent, to reach some US$ 14.0 billion
(against US$ 13.2 billion) as an outcome of the following:
- Investment income payments surged by 24.5 percent to US$ 6.5 billion (from US$ 5.2 billion) driven by the increase in direct investment income and in financial investment income (portfolio) transferred abroad.
- Transportation payments scaled up by 12.7 percent to US$ 1.4 billion (against US$
1.2 billion) owing to higher transfers by foreign navigation and aviation companies, and Egyptian navigation companies, and transfers for hiring aircrafts abroad.
- By contrast, government expenditures rolled back by 27.9 percent to US$ 1.1 billion
(from US$ 1.5 billion) due to the decline in other government expenses.
- Travel payments also dropped by 9.2 percent to US$ 2.1 billion (against US$ 2.3 billion) because of the decrease in the expenses of tourism and medical treatment abroad, lower payments of tourism companies and hotels to abroad, and expenses of training and educational missions abroad.
- Other services payments slightly declined by 0.5 percent, to stand at US$ 2.9
billion.
Services Payments as a Percentage of Total Services Payments
11.67.9
20.9
39.3
9.3
17.622.2
46.2
15.19.9
0.05.0
10.015.020.025.030.035.040.045.050.0
Transportation Travel Investment Income GovernmentPayments
Other Payments
%
2009/2010
2010/2011
- 110 - B- Net unrequited transfers accelerated by 25.6 percent to US$ 13.1 billion, due to
the 30.2 percent increase in net private transfers, to stand at US$ 12.4 billion against US$ 9.5 billion, registering its highest growth rate in the last quarter of the year under review. Notably, remittances of Egyptians working abroad accounted for some 99 percent of total private transfers. Net official transfers, however, retreated by 21.1 percent to merely US$ 752.9 million, affected by the lower grants to the Egyptian government.
Net Current Transfers (Unrequited) (US$ mn)
Change 2009/2010 2010/2011 Value % Net Current Transfers (Unrequited) 10463.4 13136.8 2673.4 25.6 1- Official Transfers (Net) (a+b-c) 954.0 752.9 -201.1 -21.1 a- Inward cash grants 563.6 532.9 -30.7 -5.4 b- Other inward grants 479.3 249.6 -229.7 -47.9 c- Official outward transfers 88.9 29.6 -59.3 -66.7 2- Private Transfers (Net) (a+b-c) 9509.4 12383.9 2874.5 30.2 a- Workers' remittances 9753.4 12592.6 2839.2 29.1 b- Other transfers 64.0 85.6 21.6 33.8 c- Private transfers abroad 308.0 294.3 -13.7 -4.4
Net Unrequited Transfers & Remittances of Egyptians Working Abroad
2.5 1.9 2.8 3.3 3.2 3.1 2.8 4.0
2.8
3.5
1.7
3.22.93.3 3.1
1.9
0.6
1.1
1.6
2.1
2.6
3.1
3.6
4.1
4.6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009/2010 2010/2011
US$ bn
Net Unrequited Transfers Remittances of Egyptians Working Abroad
- 111 -
Against this background, the current account deficit contracted by 35.9 percent to US$ 2.8 billion (from US$ 4.3 billion) owing to the pickup in current receipts by US$ 4.1 billion or 7.1 percent to US$ 62.0 billion (against US$ 57.9 billion). Thus, the rise in current receipts exceeded that of current payments, as the latter went up by US$ 2.6 billion or 4.1 percent, to post US$ 64.8 billion (against US$ 62.2 billion).
The following chart clarifies current receipts and payments in both the reporting year and year of comparison. 5/3/7 - Capital and Financial Account
The capital and financial account revealed a net outflow of US$ 4.8 billion in
2010/2011 (against a net inflow of US$ 8.3 billion a year earlier), as an outcome of the following developments:
1- Portfolio investment in Egypt∗ shifted from a net inflow of US$ 7.9 billion to a net
outflow of US$ 2.6 billion, of which US$ 3.1 billion were foreigners' net transactions on Egyptian TBs (outflows), US$ 316.7 million were their net transactions on shares (inflows), and US$ 211.0 million were net transactions on other Egyptian bonds and notes (inflows).
Representing foreigners' dealings in securities and Egyptian bonds and notes. ∗
Current Receipts & Payments
-13.2
-49.0
10.5
23.623.9
-14.0
13.121.9
27.0
-50.8-55.0
-45.0
-35.0
-25.0
-15.0
-5.0
5.0
15.0
25.0
MerchandiseExports
ServicesReceipts
Net UnrequitedTransfers
MerchandiseImports
ServicesPayments
(US$ bn)2009/2010
2010/2011
- 112 -
Analyzing such flows showed a reversal from a net inflow of US$ 4.5 billion in
the first half of the year (July/December 2010) to a net outflow of US$ 7.1 billion in the second half (January/June 2011), as foreigners sold their holdings of securities (especially Egyptian TBs which recorded net sales of US$ 6.1 billion) on the back of the current events in Egypt.
2- Net foreign direct investment in Egypt ∗∗ fell by 67.6 percent to only US$ 2.2 billion
in FY 2010/2011 (against US$ 6.8 billion a year earlier), as a result of the following developments:
- Net foreign direct investment of the oil sector retreated to US$ 191.3 million
(outflows), from US$ 3.6 billion (inflows). - Greenfield investments declined to US$ 2.2 billion (inflows), from US$ 2.7 billion. - Transfers for purchasing real estates by non- residents fell to US$ 134.0 million,
from US$ 305.3 million. - Privatization proceeds (selling of companies and local productive assets to non-
residents) went down to US$ 19.2 million from US$ 173.1 million.
Data Analysis of FDI in Egypt in FY 2010/2011 shows that the first half of the year (July/Dec. 2010) witnessed net FDI of US$ 2.3 billion, whereas the second half witnessed a sharp decline, registering a negative figure for the first time (US$ 65.0 million). ∗∗ FDI represents foreign investors that own 10 percent or more of the capital of any resident economic entity, or have an
effective voice in its management. In Egypt, a foreign investor's equity participation shall be at least 10 percent of the capital of any enterprise.
Net Foreign Investment in Egypt
2.2
6.88.1
-2.6
7.9
-9.2-10-9-8-7-6-5-4-3-2-10123456789
10
2008/2009 2009/2010 2010/2011
US$bn
Net FDI in EgyptNet Portfolio Investment in Egypt
- 113 - The following chart illustrates the sectoral distribution and the share of each sector in total FDI in Egypt. 3- Other assets and liabilities (the change in banks’ foreign assets and liabilities, the
CBE’s non-reserve foreign assets and foreign liabilities and the counterpart of some items included in the current account) posted a net outflow of US$ 4.2 billion (against US$ 7.1 billion).
4- Medium- and long-term loans and facilities showed a net repayment of US$ 1.5
billion (against US$ 562.5 million) reflecting the increase in total repayments to US$ 2.1 billion (from US$ 1.8 billion), and the decline in total disbursements to only US$ 574.0 million (from US$ 1.3 billion).
5/4-International Finance
International finance data revealed a retreat of US$ 19.1 billion in FY
2010/2011, resulting in a net outflow of US$ 6.1 billion, compared to a net inflow of US$ 13.0 billion a year earlier. That was traced, above all, to the drop in the total net inflows of resources by US$ 17.8 billion to only US$ 355.4 million (against US$ 18.2 billion). Another factor behind the retreat in international finance was the increase of US$ 1.3 billion in the outflows of interest payments and profit transfers, to US$ 6.5 billion (against US$ 5.2 billion). That was ascribable to the following main factors:
Sectoral Distribution of FDI in Egypt 2010/2011
Petroleum73.3%
Services2.2%
Tourism1.7%
Financing1.2%
Other11.8%
Real Estate1.4%
Manufacturing8.4%
- 114 - (A) Total Net Resource Flows from Abroad: - Total net foreign investment (direct and portfolio) in Egypt [Inflows - Chart (A)]
decreased by US$ 15 billion, recording net outflows of US$ 362.3 million. This reflected the decrease of portfolio investments∗ in Egypt by US$ 10.4 billion and their reversal into net outflows of US$ 2.6 billion in the reporting year, in contrast to the net inflows of US$ 7.9 billion a year before (affected by the current political situation in Egypt, and foreigners’ inclination liquidate their portfolio in the Egyptian market). Likewise, net FDI in Egypt contracted by US$ 4.6 billion to only US$ 2.2 billion (against US$ 6.8 billion).
- Total net foreign investments (direct and portfolio) abroad [Outflows - Chart (B)]
decreased by US$ 423.1 million, unfolding net outflows of US$ 1.1 billion, as a result of the decline of portfolio investment abroad by US$ 404.5 million to only US$ 117.7 million, in addition to the retreat of FDI abroad by US$ 18.6 million to US$ 958.0 million.
The following chart illustrates the developments in net foreign investments
(direct and portfolio) in Egypt and abroad in FY 2010/2011 and the preceding three years.
- Net external borrowing (medium, long, and short-term loans and facilities)
decreased, unfolding net disbursements of about US$ 1 billion (against US$ 4.1 billion, because of the new SDR allocations of US$ 1.2 billion from the IMF).
∗ Including net foreign investments in Egyptian TBs that represented inflows of US$ 4.7 billion and sovereign bonds
issued abroad in the amount of US$ 3.1 billion held by non-residents.
Net Resources in EgyptFY 13236.5
2188.6
(1,373.6)(2,550.9)
(13000)
(10000)
(7000)
(4000)
(1000)
2000
5000
8000
11000
14000
2007/2008 2008/2009 2009/2010 2010/2011
US$ mn
Net Direct Investment in Egypt Net Portfolio Investment in Egypt
Chart (A)
Net Resources AbroadFY
(1112.7)
(958.0)(959.5)
(117.7)
(1300)(1100)(900)(700)(500)(300)(100)100300500700900
110013001500
2007/2008 2008/2009 2009/2010 2010/2011
US$ mn
Direct Investment AbroadNet Portfolio Investment Abroad
Chart (B)
- 115 -
- Net official grants shrank by US$ 201.1 million or 21.1 percent, amounting to US$
752.9 million.
Net Flows of Official Grants and External Borrowing FY
752.9960.51040.5
1178.0
(500)(100)300700
110015001900230027003100350039004300
2007/2008 2008/2009 2009/2010 2010/2011
US$ mn
Official grants Net external borrowing
(B) Total Flows Abroad: Total interest payments and profit transfers abroad accelerated by US$ 1.3 billion to US$ 6.5 billion, primarily due to the rise in profit transfers abroad by foreign companies operating in Egypt, in addition to the rise of the profit transfers of portfolio investments.
International Finance from Abroad (Net) (US$ mn)
2009/10 2010/11* Change (-)
Net International Finance from Abroad (A-B) 12991.1 (6111.1) (19102.2) A- Total Net Resources from Abroad 18188.0 355.4 (17832.6) 1 - Official grants (net) 954.0 752.9 (201.1) 2- External borrowing (net) 4095.3 1040.5 (3054.8) 3- Direct investment in Egypt (net) 6758.2 2188.6 (4569.6) 4- Portfolio investment in Egypt (net) 7879.3 (2550.9) (10430.2) 5- Direct investment abroad (976.6) (958.0) 18.6 6- Portfolio investment abroad (net) (522.2) (117.7) 404.5 B- Interest Payments and Profit Transfers (Outflows) (5196.9) (6466.5) (1269.6) 1- Interest on external loans and facilities (539.7) (527.4) 12.3 2- Interest on non-residents’ deposits at Egyptian banks (17.1) (24.4) (7.3) 3- Profit transfers of direct investment (4259.3) (4959.8) (700.5) 4- Profit transfers of portfolio investment (380.8) (954.9) (574.1) *Provisional.
- 116 - 5/4/1- Foreign Direct Investment (FDI) in Egypt∗
Net FDI in Egypt contracted by 67.6 percent during FY 2010/2011, posting
merely US$ 2.2 billion (against US$ 6.8 billion). This was mainly an outcome of the rise of 73.8 percent in capital repatriation to US$ 7.4 billion, and the decline of 13 percent in total investment inflows to US$ 9.6 billion, due to the spillovers of the current events. The downtrend of investment inflows was more conspicuous in the inflows from the European Union (down by US$ 655.8 million to US$ 6.1 billion) and from the rest of the world (by US$ 756.6 million to US$ 623.9 million). Similarly, inflows from the Arab countries dropped by US$ 386.9 million to US$ 1.1 billion, given that a portion of 49.1 percent represented greenfield investments. In contrast, inflows from the USA increased by US$ 365.6 million to US$ 1.8 billion, mostly directed to oil investments (88.2 percent). The sectoral distribution of total FDI inflows in Egypt in FY 2010/2011 denoted that inflows to the petroleum sector accounted for 73.3 percent of the total. The bulk of these inflows came from the EU with a share of 70.4 percent, particularly the UK (51.1 percent) and Belgium (9.9 percent). The USA provided 22.5 percent, the Arab countries 3.0 percent (the UAE shared with 0.9 percent and Algeria with 0.6 percent), and the rest of the world with 4.1 percent, especially Switzerland (1.9 percent) and Hong Kong (0.8 percent).
∗ FDI is a category of international investment that implies the existence of a long-term relationship between a resident in
a given economy and an enterprise resident in another economy), in which a direct investor owns 10 percent or more of the ordinary shares or voting power in an incorporated enterprise, or its equivalent in an unincorporated enterprise. (Source: IMF's BOP Manual, Fifth Edition)
FDI in Egypt by Economic SectorFY 2010/2011
US$ mn
Undistributed 996.4
Manufacturing 803.9
Finance 114.0
Communications&IT 7.0
Tourism 158.0
Real Estate 134.0
Other Services 207.2
Petroleum 7014.7
Agriculture 30.4Construction & building
108.8
Services 620.2
- 117 - The breakdown of total FDI inflows to Egypt by investment purpose showed that petroleum investments ranked first as stated above, with a share of US$ 7.0 billion (73.3 percent of the total). Greenfield investments came next, with an increase of about US$ 1.6 billion (25.1 percent), followed by real estate investments with US$ 134.0 million (1.4 percent).
2188.66758.28113.4
13236.5
(9000.0)(7000.0)(5000.0)(3000.0)(1000.0)1000.03000.05000.07000.09000.0
11000.013000.015000.017000.019000.0
2007/2008 2008/2009 2009/2010 2010/2011Outflows Proceeds from selling local enitities to non-residents Petroleum sector investments Transfers for buying real estates in Egypt by non-residents Greenfield InvestmentNet Foreign Direct Investment in Egypt
Net Foreign Direct Investment in EgyptFY US$ mn
- 118 - Geographical Distribution of FDI in Egypt
(US$ mn) 2009/2010 2010/2011* Change (-) Flows of FDI in Egypt (Net) 6758.2 2188.6 (4569.6) Total Inflows 11008.1 9574.4 (1433.7) USA 1424.9 1790.5 365.6 EU Countries 6763.2 6107.4 (655.8) Germany 109.7 274.5 164.8 France 286.2 227.0 (59.2) UK 4926.1 4307.1 (619.0) Italy 67.8 246.5 178.7 Greece 64.7 41.2 (23.5) Spain 80.5 46.5 (34.0) The Netherlands 128.8 145.6 16.8 Belgium 930.1 776.7 (153.4) Luxemburg 3.7 0.7 (3.0) Denmark 6.8 17.2 10.4 Sweden 46.0 1.8 (44.2) Austria 3.9 2.3 (1.6) Cyprus 100.9 8.5 (92.4) Others 8.0 11.8 3.8 Arab Countries 1439.5 1052.6 (386.9) Saudi Arabia 323.4 206.3 (117.1) UAE 303.5 410.8 107.3 Tunisia 1.3 3.8 2.5 Kuwait 188.7 58.6 (130.1) Lebanon 10.6 18.4 7.8 Libya 337.1 12.4 (324.7) Jordan 81.8 3.0 (78.8) Bahrain 64.1 66.2 2.1 Qatar 70.4 191.5 121.1 Oman 9.8 11.9 2.1 Yemen 8.6 14.8 6.2 The Sudan 1.3 0.4 (0.9) Others 38.9 54.5 15.6 Other Countries 1380.5 623.9 (756.6) Switzerland 111.4 158.5 47.1 Japan 13.0 27.4 14.4 Canada 8.2 22.5 14.3 China 26.9 48.0 21.1 Australia 1.4 5.8 4.4 India 8.7 21.2 12.5 Turkey 25.4 27.2 1.8 Norway 6.1 2.1 (4.0) Other countries 1179.4 311.2 (868.2) Capital Repatriation** (4249.9) (7385.8) (3135.9)
* Provisional. ** It means that a direct investor recovers his share in the capital of an investment enterprise - in case of partial
or full disposal - and transfers part, or all, of it abroad.
- 119 -
5/4/2- External Official Grants The following chart reveals a retreat of net flows of official grants (cash and in-kind) to US$ 752.9 million (against US$ 954.0 million), brought about by low grant inflows, under the current transformational events in Egypt. Thus, inflows of in-kind grants fell by US$ 229.7 million or 47.9 percent to US$ 249.6 million, and also inflows of cash grants dwindled by US$ 30.7 million or 5.5 percent to US$ 532.9 million. Likewise, official grants to abroad declined by US$ 59.3 million to US$ 29.6 million compared to US$ 88.9 million.
According to the data of the Ministry of International Cooperation, new grant commitments in FY 2010/2011 shrank by US$ 406.6 million or 62.3 percent to US$ 246.0 million, particularly due to the fall of commitments with the European Commission and the USA.
643.1
317.1563.6 532.9
395.2
375.1
479.3
249.6
(77.8) (77.9) (88.9) (29.6)-200.0
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
2007/2008 2008/2009 2009/2010 2010/2011
Cash inward grants In-Kind inward grants Outward grants
Transfers of Official GrantsUS$ mn
- 120 -
Official Grants: New Commitments and Net Actual Flows (US$ mn)
2009/2010 2010/2011* 2009/2010 2010/2011*
Actual Flows Commitments Net Inflows 954.0 752.9 Inflows: 1042.9 782.5 652.6 246.0 USA 647.2 210.8 359.0 166.3 Japan 11.7 13.3 10.8 Germany 38.8 19.7 17.8 The Netherlands 0.2 Italy 1.1 15.9 Denmark 0.1 Norway 6.2 Switzerland 0.6 0.1 China 14.3 11.7 Canada 1.4 0.6 Saudi Arabia 200.1 500.0 Kuwait 0.4 Bahrain 0.3 Austria 2.4 0.4 Belgium 49.0 2.7 World Bank 8.0 12.3 European Commission 236.1 25.8 OPEC 0.7 Kuwaiti Fund for Arab Economic Development
2.9 0.3 Other countries 90.0 20.2 8.2 16.6 Outflows (88.9) (29.6)
*Provisional. Sectoral distribution of grant commitments showed that grants to the services sector were directed to the general government, education and health, and financial intermediary services.
- 121 -
Breakdown of Official Grant Commitments by Beneficiary (US$ mn)
2009/2010 % 2010/2011 % Change Total 652.6 100.0 246.0 100.0 (406.6) Productive Sectors 15.7 2.4 59.1 24.0 43.4 Agriculture and irrigation 4.4 0.7 33.0 13.4 28.6 Energy & electricity 11.3 1.7 26.1 10.6 14.8 Services Sectors 636.9 97.6 186.9 76.0 (450.0) Financial intermediaries & supporting services 15.3 2.4 24.8 10.1 9.5 Insurance and social solidarity 1.8 0.3 1.0 0.4 (0.8) General government 117.1 17.9 82.3 33.5 (34.8) Education and health 64.1 9.8 78.7 32.0 14.6 Others 438.6 67.2 0.1 0.0 (438.5) 5/4/3- External Debt
External debt (public and private - all maturities) denominated in US dollar, increased by US$ 1.2 billion to US$ 34.9 billion at the end of June 2011 (against US$ 33.7 billion at the end of June 2010). The increase is partly ascribed to the net repayments of US$ 1 billion of loans and facilities, and the decline in the balances of Egyptian bonds and notes issued in foreign markets due to the purchase of part of them (US$ 242.0 million) by some resident entities. Another factor was the appreciation of most currencies of borrowing versus the US dollar by US$ 2.4 billion worth. The public sector was the major obligor, with a share of 94.5 percent of the total (US$ 33.0 billion) at the end of June 2011, while the private sector accounted for the remaining 5.5 percent (US$ 1.9 billion).
- 122 - External Debt Components∗
The breakdown of external debt by maturity indicated that medium- and long-term loans and facilities (guaranteed and non-guaranteed) accounted for 92.1 percent (US$ 32.1 billion) of the external debt at end of June 2011, of which long-term debt represented US$ 31.7 billion, and medium-term debt made up US$ 494.0 million (mostly LE bonds issued abroad). Short-term debt accounted for the remaining 7.9 percent or US$ 2.8 billion of the total debt. About US$ 17.5 billion ∗∗ of medium- and long-term debt is owed to Paris Club members (50.1 percent of total debt). Meanwhile, debt to countries other than Paris Club members reached about US$ 1.0 billion (2.9 percent). Debt to international and regional organizations reached US$ 10.8 billion (30.9 percent of the total debt) at the end of June 2011, up by US$ 831.1 million over the end of June 2010. The stock of Egyptian bonds and notes (holdings of non-residents) amounted to US$ 2.8 billion, constituting 8.1 percent of the total external debt. That figure included US$ 186.9 million of sovereign dollar bonds issued by the government in July 2001 and reaching maturity in July 2011; US$ 1.3 billion of guaranteed government securities issued by the government in September 2005 and falling due in September 2015; US$ 343.4 million of LE bonds issued in July 2007 and reaching maturity in July 2012; and US$ 1.0 billion of treasury bills (holdings of non-residents) issued abroad in April 2010 and maturing as two tranches in 2020 and 2040. Meanwhile, non-guaranteed debt of the private sector reached only US$ 17.5 million.
External Debt StructureEnd of June 2011
Short - term debt7.9%
Rescheduled bilateral debt36.8%
Other bilateral debt15.0%
Supplier's & buyer's credits1.2%
International & regional organizations
30.9%
Egyptian bonds and notes8.1%
Private sector (Non -guaranteed)
0.1%
* The structure of Egypt’s external debt by currency of borrowing is one of the key indicators used by the CBE to
determine the structure of international reserves by currency.
∗∗ Representing bilateral loans (rescheduled and non-rescheduled) and suppliers ’ and buyers’ credits.
- 123 - Short-term debt balance declined by US$ 197.3 million to US$ 2.8 billion, of which 65.6 percent was owed by the private sector. The decline came on the back of the fall in non-residents’ short-term deposits by 28.5 percent, to US$ 972.7 million, and the rise in short-term trade facilities by 11.9 percent to US$ 1.8 billion. External Debt by Debtor∗ The breakdown of external debt by debtor at the end of June 2011 indicated the increase in the debt of the central government by US$ 842.9 million to US$ 27.1 billion, of other sectors by US$ 367.4 million to US$ 4.6 billion, and the monetary authority’s** by US$ 239.8 million to US$ 1.5 billion. On the other hand, the debt of banks decreased by US$ 238.6 million to only US$ 1.7 billion.
External Debt by DebtorShare in Total Increase/Decrease
FY
842.9431.6
4176.6
1048.2239.8
(78.3)(238.6)
166.7
(744.6)
(5715.4)
516.6367.4
-6500.0
-4500.0
-2500.0
-500.0
1500.0
3500.0
5500.0
2008/2009 2009/2010 2010/2011
(US$ mn)
Central & Local Government Monetary Authority
Banks Other Sectors
Despite the aforementioned developments, the structural distribution of the external debt by debtor was not affected. Hence, the central government still accounted for the majority of total external debt (77.6 percent) at the end of June 2011, followed by the other sectors (13.1 percent), banks (5.0 percent) and the monetary authority (4.3 percent).
∗ As of September 2008, the CBE - in coordination with the Ministry of Finance - reclassified part of the debt activities of
some organizations under the “central and local government sector” instead of “ other sectors ”. ** Including SDR allocations of US$ 1.2 billion made by the IMF for Egypt in July/Dec. of FY 2009/2010.
- 124 -
June 2010 June 2011
External Debt by Main Creditor The breakdown of external debt by creditor showed that 42.9 percent of the total debt balance was owed to the four major member countries of Paris Club, namely Japan (12.2 percent), Germany (11.0 percent), France (10.7 percent) and USA (9.0 percent). The debt owed to Arab countries represented 4.6 percent, mainly due to Kuwait (2.3 percent), Saudi Arabia (0.9 percent) and the UAE (0.5 percent).
External Debt by Debtor )US$ bn(
Monetary Authority
1.3
Banks 2.0
Other Sectors
4.2
Central & Local
Government 26.2
Monetary Authority
1.5
Banks 1.7
Other Sectors
4.6
Central & Local
Government 27.1
External Debt by Creditor
Egyptian bonds and notes
8.1%France10.7%
USA9.0%
Japan12.2%
Arab Countries4.6%
United Kingdom2.7%
Germany11.0%
International organizations
30.9%
Other countries10.9%
June2011
- 125 - External Debt by Currency of Borrowing The distribution of external debt by currency of borrowing showed that the US dollar was the main currency of borrowing, with a relative importance of 39.4 percent, because of outstanding obligations in the US dollar to creditors other than the USA. The euro ranked second with a relative importance of 28.8 percent, followed by the Japanese yen (12.8 percent), the SDR (7.5 percent) and the Kuwaiti dinar (6.1 percent). Debt Service As for the external debt service (medium- and long-term), debt service payments scaled up by US$ 158.4 million, amounting to US$ 2.8 billion during FY 2010/2011. That was an outcome of the rise in principal repayments by US$ 174.7 million to US$ 2.1 billion, and the fall in interest payments by US$ 16.3 million to US$ 636.2 million.
External Debt by Major CurrenciesEnd of June 2011
Euro28.8%
Kuwaiti dinar6.1%
Swiss f ranc1.8%
Egy ptain Pound1.7%
Japanese y en12.8%
US dollar 39.4%
Other currencies1.9%
SDRs7.5%
External Debt and Debt ServiceEnd of June
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2005 2006 2007 2008 2009 2010 20112.32.42.52.62.72.82.93.03.13.2
External Debt Debt Service (right axis)
US$ bn US$ bn
- 126 - Main External Debt Indicators Notwithstanding the dramatic events the country has witnessed in the wake of the Revolution, the main external debt indicators denoted merely a slight increase in FY 2010/2011. Accordingly, the ratio of the debt service to the exports of goods and services climbed to 5.7 percent (against 5.5 percent during the previous FY). The ratio of short-term debt to NIR rose to 10.4 percent (from 8.4 percent), whereas its ratio to total debt declined to 7.9 percent (from 8.8 percent). External debt/GDP ratio dropped to 15.2 percent (from 15.9 percent). And the ratio of external debt service to current receipts maintained the level of the previous FY (4.5 percent). The external debt per capita moved up to US$ 413.6 (from US$ 399.2).
The following chart highlights the external debt indicators of Egypt, relative to the countries of other economic regions. According to World Bank classification, Egypt's debt indicators were within safety limits. The external debt-to-GDP ratio (15.2 percent) is considered one of the best world levels that ranged between 15.3 percent (for the emerging Asian economies) and 66.0% (for Eastern and Central Europe). Recording 5.7 percent, the ratio of external debt service to the exports of goods and services was less than the global levels – as cited in the IMF’s World Economic Outlook, published in September 2011- that ranged between 11.0 percent (for sub-Saharan Africa) and 55.8 percent (for Eastern and Central Europe) for 2011.
External Debt Indicators
End of June
59.9 71.071.4
20.1 15.215.9
450.0413.6
399.2
0.025.050.075.0
100.0125.0150.0175.0200.0225.0250.0275.0300.0
2007/08 2008/09 2009/10 2010/11
%
370.0380.0390.0400.0410.0
420.0430.0440.0450.0460.0
(US$)
External Debt / Exports of Goods and Services External Debt /GDP External Debt per capita (US$) (right axis)
- 127-
Main External Debt Indicators in Egypt Relative to Other Regional Groups
External
Debt/GDP External
Debt/Exports of Goods and
Services
Debt Service/Exports of Goods and Services Region
2010 2011 2010 2011 2010 2011 East & Central Europe 65.5 66.0 179.2 164.2 59.7 55.8 Asia 15.3 15.3 48.8 47.5 18.5 20.0 Latin America & the Caribbean 21.2 20.1 102.5 93.1 31.2 29.2 Sub-Saharan Africa 22.8 21.5 65.5 57.6 15.8 11.0 Middle East & North Africa 31.9 27.1 65.9 52.4 17.2 15.3 Egypt* 15.9 15.2 71.0 71.4 5.5 5.7 Source: World Economic Outlook – Sept. 2011, Statistical Annex. *According to CBE BOP data. New Commitments on Loans and Facilities
In FY 2010/2011, new commitments on loans and facilities reached US$ 1.7 billion (mostly commitments with international and regional organizations that represented US$ 1.6 billion or 93.9 percent of total commitments, whereas commitments on bilateral loans recorded US$ 106.2 million or 6.1 percent). Hence, total commitments shrank by US$ 1.4 million below the level of the previous FY, because of the significant fall in the commitments with the World Bank and Japan.
External Debt Indicators
FY
3.9
4.54.5
7.3
10.4
8.47.4
7.9
8.8
4.65.75.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2007/08 2008/09 2009/10 2010/11
%
Debt Serv ice / Current Receipts (Including Transf ers)Short-term Debt / Net International Reserv esShort-term Debt / Total External DebtDebt Serv ice / Exports of Goods and Serv ices
Annex
- 129 -
Statistical Section
1- Indicators of Development and Economic Growth
(1/1) GDP at Factor Cost by Economic Sector (at 2006/2007 Prices) (1/2) GDP by Expenditure at 2006/2007 Prices (1/3) Implemented Investments (1/4) Output of Main Crops (1/5) Position of Egyptian Cotton (1/6) Exports of Egyptian Cotton (1/7) Output of Main Industrial Products (1/8) Consumer Price Index (Urban Population) (January 2010 =100) (1/9) Producer Price Index (2004/2005 =100) 2- Monetary Aggregates
(2/1/1) CBE Financial Position: Reserve Money and Counterpart Assets (2/1/2) Banking Survey: Domestic Liquidity and Counterpart Assets (2/1/3) Banking Survey: Deposits in Local Currency (2/1/4) Banking Survey: Deposits in Foreign Currencies (2/1/5) Banking Survey: Foreign Assets and Liabilities (2/1/6) Banking Survey: Domestic Credit and Other Items (Net) (2/1/7) Total Saving Vessels (2/1/8) Bank Lending and Discount Balances to Business Sector
Financial Sector (2/2/1) Structure of the Egyptian Banking System and Banking Density (2/2/2) Representation Offices Registered with the CBE (at end of June 2011) (2/2/3) Local Mutual Funds: Authorized and Operating as at end of June 2011 Activity of the Banking System
Central Bank of Egypt
(2/3/1) Note Issued by Denomination (2/3/2) Currency in Circulation outside CBE by Denomination (2/3/3) CBE: Transactions via RTGS and SWIFT
- 130 - Banks
(2/4/1) Aggregate Financial Position (2/4/2) Deposits by Maturity (2/4/3) Deposits by Sector (2/4/4) Deposits by Economic Activity (2/4/5) Portfolio Investments by Sector (2/4/6) Lending and Discount Balances by Sector (2/4/7) Credit by Sector (2/4/8) Lending and Discount Balances by Economic Activity Interest Rates
(2/5/1) Discount and Interest Rates on Deposits and Loans in Egyptian Pound (2/5/2) Domestic Interest Rates on 3-Month Deposits in Major Currencies (2/5/3) Interest Rates on Treasury Bills (Weekly Weighted Averages) 3- Non-Banking Financial Sector
(3/1) Companies Listed on the Egyptian Exchange (3/2) Trading in Shares on the Egyptian Exchange (3/3) Trading in Bonds on the Egyptian Exchange (3/4) Foreigners’ Transactions on the Stock Exchange (3/5) Global Depository Receipts (GDRs) (3/6) Outstanding Balance of Treasury Bills (Quarterly) (3/7) Outstanding Balance of Treasury Bills (Weekly) (3/8) Outstanding Balance of Treasury Bonds 4- Public Finance & Domestic Public Debt
(4/1) Consolidated Fiscal Operations of the General Government (Total Expenditures) (4/2) Consolidated Fiscal Operations of the General Government (Total Revenues) (4/3) Summary of the Consolidated Fiscal Operations of the General
Government (4/4) Gross Domestic Debt (4/5) National Investment Bank (Resources & Uses)
- 131 – 5- External Transactions
(5/1) Balance of Payments (US$) (5/2) Exports by Degree of Processing (5/3) Imports by Degree of Use (5/4) Regional Distribution of Exports and Imports (5/5) Average LE Exchange Rates (in piasters per foreign currency unit) (5/6) External Debt Structure (5/7) Main External Debt Indicators (5/8) Distribution of External Debt by Main Currencies
(LE mn)
Public Private Total Public Private Total Public Private Total
Total GDP 310236.3 527505.0 837741.3 319640.4 534329.8 853970.2 3.0 1.3 1.9Agriculture, Forests & Fishing 21.1 110256.0 110277.1 21.9 113256.9 113278.8 3.8 2.7 2.7 Extractions 93643.0 21070.0 114713.0 93870.0 21508.0 115378.0 0.2 2.1 0.6
Petroleum 40104.0 6951.0 47055.0 41081.0 7126.0 48207.0 2.4 2.5 2.4Natural gas 53139.0 11082.0 64221.0 52385.0 11291.0 63676.0 -1.4 1.9 -0.8Others 400.0 3037.0 3437.0 404.0 3091.0 3495.0 1.0 1.8 1.7
Manufacturing Industries 21117.0 113647.0 134764.0 20999.0 112485.0 133484.0 -0.6 -1.0 -0.9
Petroleum refining 3368.0 2731.0 6099.0 3293.0 2777.0 6070.0 -2.2 1.7 -0.5Others 17749.0 110916.0 128665.0 17706.0 109708.0 127414.0 -0.2 -1.1 -1.0
Electricity 10402.0 1508.0 11910.0 11058.0 1385.2 12443.2 6.3 -8.1 4.5Water 2927.0 0.0 2927.0 3057.0 0.0 3057.0 4.4 0.0 4.4Drainage 702.2 0.0 702.2 732.0 0.0 732.0 4.2 0.0 4.2Construction & Building 4777.0 39230.0 44007.0 4973.0 40652.0 45625.0 4.1 3.6 3.7Transportation & Storage 9155.0 27158.0 36313.0 9430.0 27611.0 37041.0 3.0 1.7 2.0Communications 10130.0 24164.0 34294.0 10742.0 25834.0 36576.0 6.0 6.9 6.7Information 635.4 1165.4 1800.8 651.0 1201.0 1852.0 2.5 3.1 2.8Suez Canal 25328.5 0.0 25328.5 28234.0 0.0 28234.0 11.5 0.0 11.5Wholesale & Retail Trade 3180.0 86266.0 89446.0 3264.0 87582.0 90846.0 2.6 1.5 1.6Finance 21317.0 11313.0 32630.0 21646.0 11520.0 33166.0 1.5 1.8 1.6Insurance 2160.0 615.0 2775.0 2220.0 629.0 2849.0 2.8 2.3 2.7Social Solidarity 29016.0 0.0 29016.0 30255.0 0.0 30255.0 4.3 0.0 4.3Tourism 320.0 35328.8 35648.8 332.0 33229.0 33561.0 3.8 -5.9 -5.9Real Estate 975.0 22511.0 23486.0 1002.0 23251.0 24253.0 2.8 3.3 3.3
Real Estate Ownership 395.0 11739.0 12134.0 409.0 12186.0 12595.0 3.5 3.8 3.8Business Services 580.0 10772.0 11352.0 593.0 11065.0 11658.0 2.2 2.7 2.7
General Government 73641.0 0.0 73641.0 76337.0 0.0 76337.0 3.7 0.0 3.7Social Services 789.1 33272.8 34061.9 816.5 34185.7 35002.2 3.5 2.7 2.8
Education 0.0 9578.0 9578.0 0.0 9839.0 9839.0 0.0 2.7 2.7Health 756.0 10361.0 11117.0 782.0 10628.0 11410.0 3.4 2.6 2.6
Others 33.1 13333.8 13366.9 34.5 13718.7 13753.2 4.2 2.9 2.9Source: Ministry of Planning.
At 2006/2007 prices- 132 - (1/1) GDP at Factor Cost by Economic Sector
Sectors 2009/2010 2010/2011 2010/2011Growth Rate %
2009/2010 2010/2011 2009/2010 2010/2011 2009/2010 2010/2011
1- GDP at Market Price (2+5-6) 878.4 893.9 100.0 100.0 5.1 1.8
2- Total Domestic Expenditure (3+4) 898.3 925.8 102.3 103.6 4.9 3.1
3- Final Consumption 722.3 757.5 82.2 84.8 4.2 4.9
Final private consumption 627.2 658.8 71.4 73.7 4.1 5.0
Final government consumption 95.1 98.7 10.8 11.1 4.5 3.8
4- Gross Capital Formation 176.0 168.3 20.1 18.8 8.0 -4.4
Investments 172.5 162.9 19.7 18.2 7.7 -5.6
Change in stock 3.5 5.4 0.4 0.6 .. ..
5- Exports of Goods & Services 240.6 249.6 27.4 27.9 -3.0 3.7
6- Imports of Goods & Services 260.5 281.5 29.7 31.5 -3.2 8.1
7- Gross Domestic Saving (1-3) 156.1 136.4 17.8 15.3 9.9 -12.6
..Not available
(1/2) GDP by Expenditure ( At 2006/ 2007 prices )
Source: Ministry of planning.
Value at LE bn Structure % Growth Rate %
- 133 -
Government Sector
Economic Authorities
Public Companies
Private Sector Total Government
SectorEconomic Authorities
Public Companies
Private Sector Total
Total Investments 48349.7 29264.5 27474.7 126738.3 231827.2 39880.9 16363.3 28091.9 144730.3 229066.4 Agriculture, Irrigation & Reclamation 2678.5 199.3 0.3 3865.0 6743.1 2570.1 76.6 0.0 3558.0 6204.7 Mining & Crude Oil 0.0 4.5 347.5 28380.0 28732.0 0.0 3.7 392.5 10500.0 10896.2 Natural Gas 0.0 55.0 1450.0 31060.1 32565.1 0.0 11.6 1255.0 24300.0 25566.6 Other Extractions 8.6 0.0 0.0 0.0 8.6 1.4 0.0 0.0 0.0 1.4 Oil Refining 0.0 0.0 315.4 2800.0 3115.4 0.0 0.0 278.3 3600.0 3878.3 Other Manufacturing 589.4 90.2 6241.7 15500.0 22421.3 201.2 22.2 4380.0 16280.0 20883.4 Electricity 958.9 1767.1 13136.6 0.0 15862.6 903.0 1010.8 14963.0 0.0 16876.8 Water 7533.4 880.8 0.0 0.0 8414.2 4787.7 2140.0 0.0 0.0 6927.7 Construction & Building 61.2 0.0 1001.9 3100.0 4163.1 69.7 0.0 887.5 4800.0 5757.2 Transportation & Storage 10963.7 2564.1 3236.4 10316.0 27080.2 5191.4 2581.0 4687.4 9576.9 22036.7 Communications 971.4 1223.7 0.0 17256.2 19451.3 3396.5 153.1 0.0 16193.9 19743.5 Information 0.0 0.0 0.0 0.0 0.0 0.0 781.1 0.0 2200.0 2981.1 Suez Canal 0.0 564.5 0.0 0.0 564.5 0.0 526.1 0.0 0.0 526.1 Wholesale & Retail Trade 0.0 90.5 146.5 5600.0 5837.0 0.0 387.4 105.4 10000.0 10492.8 Financial Intermediaries 78.5 159.0 662.4 0.0 899.9 59.2 351.3 742.9 0.0 1153.4
Insurance and Social Solidarity 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Tourism 8.3 15.2 322.0 4038.0 4383.5 2.2 15.4 350.0 5371.5 5739.1
Real Estate 424.1 1445.8 0.0 15500.0 17369.9 171.4 2194.0 0.0 30550.0 32915.4
Educational Services 4596.0 11.0 0.0 1600.0 6207.0 2982.8 171.9 0.0 2650.0 5804.7 Health Services 2808.3 301.9 550.0 1350.0 5010.2 2609.7 196.5 0.0 2350.0 5156.2 Drainage 8538.8 551.1 0.0 0.0 9089.9 6990.9 1304.9 0.0 0.0 8295.8 Others 8130.6 262.1 64.0 5451.7 13908.4 6138.7 386.6 49.9 2800.0 9375.2Amounts recovered from the foreign investor to EGPC 0.0 19078.7 0.0 -19078.7 0.0 0.0 0.0 0.0 0.0 0.0 Settlements 0.0 0.0 0.0 0.0 0.0 3805.0 4049.1 0.0 0.0 7854.1Source: Ministry of Planning.
(1/3) Implemented Investments
2010/2011 (LE mn & Current Prices)
2009/2010
- 134 -
Crops Productivity Production Area Productivity Production Area ProductivityUnit (Thousand (Thousand per Feddan (Thousand (Thousand per Feddan
Tons) Feddans) Tons) Feddans)Wheat d 7169 3001 15.92 7574 3200 16.91
Barley d 117 88 11.08 417 255 13.63
Maize Summer Crops d 5365 1691 22.66 5365 1740 22.02
Nile Crops d 804 278 20.66 847 200 20.17
Millet Summer Crops d 774 333 20.61 691 329 15.01
Nile Crops d 7 3 16.92 95 40 16.90
Rice ton 4330 1094 3.958 4327 1093 3.96
Beans d 232 184 8.15 372 225 9.48
Lentils d 2 3 4.14 17 18 6.00
Cotton (seeds) mc 281 284 6.29 431 369 7.419
Flax ton 34 8 4.25 198 45 4.40
Groundnuts d 203 159 17.0 202 159 17.044
Sesame d 46 88 4.38 46 88 4.36
Soybeans ton 43 36 1.195 43 36 1.19
Sunflower ton 37 35 1.060 37 34 1.09
Sugar cane ton 15482 317 48.84 18618 360 51.716
Sugar beet ton 7840 386 20.31 6960 305 22.819
Vegetables ton 17510 1496 11.705 23215 2035 11.407
Onion ton 2246* 134 13.811 2537 218 11.637
Fruits ton 10073 1511 .. 10177 1450 ..
d: Ardeb mc: metric cantar
* Including 200 thousand tons of winter onion and 250 thousand tons of other seasonal onion.
- 135 -
Source : Ministry of Planning .
(1/4) Output of Main Crops
2010/2011 (Estimates)2009/2010
Season Productivity Opening Total Total Domestic Imported(Thousand Metric cantar/ Stock Supply Export Consumption Cotton Feddans) per Feddan Commitments
2001/2002 731 1025 5238 6263 8.6 1082 7345 2177 2905 ..
2002/2003 706 1316 4411 5727 8.1 2279 8006 3649 4140 120
2003/2004 531 1168 2795 3963 7.5 24 3987 1137 1412 1061
2004/2005 715 1551 4282 5833 8.3 370 6203 2837 3247 1458
2005/2006 650 858 3161 4019 6.2 118 4137 1865 1936 772
2006/2007 536 1058 3157 4215 7.9 337 4552 1555 1622 656
2007/2008 575 815 3627 4442 7.7 1411 5853 2584 2535 659
2008/2009 313 459 1647 2106 6.7 736 2842 381 879 1373
2009/2010 288 257 1634 1891 6.5 436 2327 1560 556 ..
2010/2011 375 556 2059 2615 7.0 226 2841 2213 646 ..
Source: Cotton, Spinning and Weaving Holding Company.
.. Not available
- 136 -
(Thousand metric cantars)
(1/5) Position of Egyptian Cotton
Extra Long
Long & long meduim Total
Cultivated Area
Crop
(Thousand metric cantars)
Quantity Relative Importance Quantity Relative
Importance Quantity Relative Importance
Export Commitments 397 100.0 1506 100.0 2211 100.0Asian Countries 197 49.6 1166 77.3 1365 61.7India 47 11.8 546 36.3 556 25.2Pakistan 10 2.5 190 12.6 208 9.4China 95 23.9 330 21.9 423 19.1South Korea 11 2.8 29 1.9 25 1.1Japan 11 2.8 17 1.1 24 1.1Bangladesh 12 3.0 27 1.8 50 2.3Indonesia 5 1.3 10 0.7 12 0.5Taiwan 0 0.0 0 0.0 5 0.2Thailand 6 1.5 14 1.0 53 2.4Malaysia 0 0.0 1 0.0 9 0.4Singapore 0 0.0 2 0.0 0 0.0EU Countries 17 4.3 64 4.3 160 7.3Italy 11 2.8 42 2.8 61 2.8
Portugal 5 1.3 7 0.5 5 0.2
Germany 0 0.0 14 0.9 85 3.8
Greece 0 0.0 0 0.0 1 0.1
UK 0 0.0 0 0.0 0 0.0Slovenia 1 0.2 1 0.1 7 0.3Belgium 0 0.0 0 0.0 1 0.1Other European Countries 59 14.8 161 10.6 317 14.3Switzerland 2 0.5 70 4.6 210 9.5Turkey 57 14.3 91 6.0 107 4.8The USA 0 0.0 0 0.0 53 2.4Arab Countries 113 28.5 42 2.8 101 4.6 UAE 0 0.0 5 0.3 2 0.1Bahrain 4 1.0 8 0.5 15 0.7Morocco 1 0.3 4 0.3 3 0.2Qatar 107 27.0 25 1.7 67 3.0Libya 0 0.0 0 0.0 14 0.6Syria 1 0.2 0 0.0 0 0.0Other Countries 11 2.8 30 2.0 47 2.1Brazil 11 2.8 30 2.0 42 1.9Latvia 0 0.0 0 0.0 1 0.0Croatia 0 0.0 0 0.0 1 0.0Eritrea 0 0.0 0 0.0 1 0.1South Africa 0 0.0 0 0.0 2 0.1
Free Market (Egypt) 0 0.0 43 3.0 168 7.6
Source: Cotton, Spinning and Weaving Holding Company.
- 137 -
2010/2011 Season
Till the end of June
(1/6) Exports of Egyptian Cotton
Till the end of June
2008/2009 Season
Till the end of June
2009/2010 Season
2009/2010Unit Public Private Total Public Private Total
Refined sugar Thousand tons 1312.5 675.7 1988.2 1358.4 699.4 2057.8Animal & poultry fodder " 602.3 12437.8 13040.1 617.0 12762.1 13379.1Carbonated drinks Box (million) 0.0 420.0 420.0 0.0 432.0 432.0Cigarettes Billion 75.2 13.8 89.0 77.7 14.4 92.1Cotton yarn, fibran Thousand tons 82.4 231.8 314.2 84.3 236.2 320.5Wool yarn " 6.9 27.4 34.3 7.0 28.0 35.0Silk yarn " 0.7 22.3 23.0 0.7 22.4 23.1Synthetic fibres " 3.2 105.7 108.9 3.3 105.9 109.2Blankets Million pieces 1.4 21.3 22.7 1.4 21.5 22.9Ready-made clothes " " 12.9 301.6 314.5 12.9 311.5 324.4Cars Units 9276.0 33351.0 42627.0 9415.0 34212.0 43627.0Buses " 338.0 7113.0 7451.0 341.0 7220.0 7561.0Lorries " 672.0 27425.0 28097.0 678.0 27700.0 28378.0Washing machines Thousands 6.9 1105.1 1112.0 7.0 1121.7 1128.7Refrigerators " 6.7 1124.3 1131.0 6.8 1125.4 1132.2Electric lamps Million 32.0 206.0 238.0 33.0 207.0 240.0Butagaz heaters Thousands 97.0 237.0 334.0 98.0 240.0 338.0Water metres Thousands 614.0 0.0 614.0 615.0 0.0 615.0Etectric metres Thousands 983.0 0.0 983.0 985.0 0.0 985.0Aluminium & sheets thereof Thousand tons 319.0 0.0 319.0 320.5 0.0 320.5Reinforcing iron Thousand tons 133.1 5500.2 5633.3 133.7 5550.6 5684.3Cement " " 3699.2 40175.1 43874.3 3701.2 40183.2 43884.4Glass sheets " " 35.2 170.8 206.0 35.3 170.9 206.2Phosphatic fertilizers " " 603.0 1003.3 1606.3 604.0 1006.4 1610.4Azotic fertilizers " " 501.4 12671.0 13172.4 501.6 12675.0 13176.6Caustic soda Thousand tons 157.4 0.0 157.4 157.5 0.0 157.5Tyres Thousands 761.0 532.4 1293.4 768.6 5377.2 6145.8Laundry soap Thousand tons 54.5 401.8 456.3 55.0 405.8 460.8Toilet soap Thousand tons 40.8 170.3 211.1 41.2 172.0 213.2
- 138 -
Source : Ministry of Planning.
Products
(1/7) Output of Main Industrial Products
2010/2011
Relative Fiscal Year Fiscal Year
Weights 2009 2010 2011 2009/2010 2010/2011
All Items 100.0 93.0 102.4 114.5 10.1 11.8
Food & non-alcoholic beverages 39.92 89.3 105.9 126.0 18.6 19.0
Alcoholic beverages & to bacco and Narcotics 2.19 100.0 100.0 169.9 0.0 69.9
Clothing & footwear 5.41 99.4 100.0 102.2 0.6 2.2
Housing, water, electricity, gas & fuel 18.37 96.5 99.3 100.4 2.9 1.1
Furnishings, household equipment & routine maintenance of the house 3.77 99.3 102.6 105.2 3.3 2.5
Health care 6.33 99.7 100.0 101.9 0.3 1.9
Transportation 5.68 99.6 100.6 101.7 1.0 1.0
Communications 3.12 100.0 99.9 100.0 -0.2 0.1
Recreation & culture 2.43 99.5 102.4 108.4 2.9 5.9
Education 4.63 91.4 100.0 124.3 9.4 24.3
Restaurants & hotels 4.43 95.9 100.2 112.4 4.5 12.1
Miscellaneous goods and services 3.72 86.5 100.7 103.2 16.4 2.4
Source: Central Agency for Public Mobilization and Statistics(CAPMAS), (Monthly Bulletin of Consumer Price Index) .
the 2008/2009 survey of income, expenditure and consumption using January 2010 as a base period.
- 139 -
* The 9th series of CPI was introduced in August 2010. The weights involved in the formation of the Index were taken from theresults of
(1/8) Consumer Price Index (Urban Population) (January 2010=100)*
Inflation Rate (%)End of June
Group
Relative July / June July / June
Weights 2009 2010 2011 2009/2010 2010/2011
All Items 100.0 148.2 160.9 192.1 8.6 19.4
Agriculture, Forestry and Fishing 25.1 188.9 210.9 261.4 11.6 23.9
Mining and Quarrying 21.8 134.6 147.8 201.5 9.8 36.3
Manufacturing 38.9 140.0 149.6 165.0 6.9 10.3
Electricity, Gas, Steam and Air Conditioning Supply 2.3 115.0 140.3 140.3 22.0 0.0
Water Supply, Sewerage,Waste Management and Remediation Activities 2.0 138.7 146.5 146.5 5.6 0.0
Transportation and Storage 2.8 124.2 124.8 127.3 0.5 2.0
Accommodation and Food Service Activities 5.0 114.6 110.6 125.1 -3.5 13.1
Information and Communications 2.1 112.5 112.5 112.5 0.0 0.0
-140 -
End of
Group June
(1/9) Producer Price Index (PPI) (2004/2005 = 100)
Inflation Rate (%)
Source: Central Agency for Public Mobilization and Statistics (CAPMAS), ( Monthly PPI Bulletin issued every two months ).
(LE mn)
End of June 2005 2006 2007 2008 2009 2010 2011
Reserve Money 101080 116050 134126 169911 175104 203071 250992
Currency in circulation outside CBE * 67241 78604 92174 111412 126268 144253 179096
Banks' deposits in local currency 33839 37446 41952 58499 48836 58818 71896
Counterpart Assets 101080 116050 134126 169911 175104 203071 250992
Net Foreign Assets 37295 61302 95372 180333 171732 190234 147197
Foreign Assets 108738 129477 160197 182021 173055 198605 156331
Gold 4500 6429 6744 8695 9385 12393 16343
Foreign securities 16665 48353 108606 151175 150556 162247 114608
Foreign currencies 87573 74695 44847 22151 13114 23965 25380
Foreign Liabilities + 71443 68175 64825 1688** 1323 8371 9134
Net Domestic Assets 63785 54748 38754 -10422 3372 12837 103795
Net Claims on Government 122264 114055 117254 81872 68613 80611 102562
Claims; of which: 227367 171808 192192 159697 146899 150288 189620
Government securities 208021 164761 166724 123123** 121708 121533 130597
Deposits 105103 57753 74938 77825 78286 69677 87058
Net Claims on Banks -21983 1018 59512 77581 334 29010 147
Claims 11572 17412 77270 97828 21786 49863 23496
Deposits in foreign currencies 33555 16394 17758 20247 21452 20853 23349
Other Items (Net)+ -36496 -60325 -138012 -169875 -65575 -96784 1086Source : Central Bank of Egypt.* Including subsidiary coins issued by the ministry of Finance.+ According to the updated statistical treatment adopted by the IMF, SDR allocations are to be classified as foreign liabilities rather than capital accounts, as of August 2009.** At the end of June 2008, the CBE and the government agreed on using part of the rescheduled debts -under Paris Club agreement- which are not yet due, to settle part of the government debt to the CBE.
(2/1/1) CBE Financial Position: Reserve Money and Counterpart Assets
- 141 -
End of June 2005 2006 2007 2008 2009 2010 2011
1- Domestic Liquidity 493884 560356 662688 766664 831211 917459 1009411
A- Money Supply 89685 109274 131290 170579 182991 214040 248707Currency in circulation outside the banking system 63029 74239 86860 104656 118146 135209 167887Demand deposits in local currency 26656 35035 44430 65923 64845 78831 80820
B- Quasi-Money 404199 451082 531398 596085 648220 703419 760704Time & saving deposits in local currency 283020 314188 377424 436268 481054 545303 583732Demand and time & saving deposits in foreign currencies 121179 136894 153974 159817 167166 158116 176972
2- Counterpart AssetsNet foreign assets 80913 133385 218629 303680 * 254134 282408 253500Domestic credit 466771 509532 531314 570953 * 695326 775268 892766Other items (net) -53800 -82561 -87255 -107969 -118249 -140217 -136855
* Due to the agreement between the CBE and the government, as mentioned in the footnote of table (2/1/1).Source : Central Bank of Egypt.
(2/1/2) Banking Survey: Domestic Liquidity and Counterpart Assets
(LE mn)
- 142 -
End of June 2005 2006 2007 2008 2009 2010 2011Total Deposits in Local Currency 309676 349223 421854 502191 545899 624134 664552
1- Demand Deposits 26656 35035 44430 65923 64845 78831 80820
Public business sector * 3027 4934 6278 8698 7145 8938 6670
Private business sector 12228 15863 20681 34301 33240 41246 43324
Household sector 11985 14831 18378 24003 25235 29510 31645
Minus: Purchased cheques & drafts 584 593 907 1079 775 863 819
2- Time and Saving Deposits 283020 314188 377424 436268 481054 545303 583732
Public business sector * 13700 15465 17186 20736 21654 23788 22608
Private business sector 27439 25580 56823 85415 71076 73183 60736
Household sector 241881 273143 303415 330117 388324 448332 500388
- 143 -(2/1/3) Banking Survey: Deposits in Local Currency
Source : Central Bank of Egypt.
*Including all public sector companies subject or not to law No 203 for 1991.
(LE mn)
End of June 2005 2006 2007 2008 2009 2010 2011Total Deposits in Foreign Currencies 121179 136894 153974 159817 167166 158116 176972
1- Demand Deposits 18140 18533 26917 26581 32050 33901 41298
Public business sector * 1249 935 947 943 1334 1055 1248
Private business sector 10234 10417 18453 17417 21104 22313 26039
Household sector 6823 7392 7689 8404 9712 10673 14077
Minus: Purchased cheques & drafts 166 211 172 183 100 140 66
2- Time and Saving Deposits 103039 118361 127057 133236 135116 124215 135674
Public business sector * 2946 4734 5774 8202 7401 5419 6301
Private business sector 21103 28845 30641 39785 37217 32594 34202
Household sector 78990 84782 90642 85249 90498 86202 95171
(LE mn)
Source: Central Bank of Egypt.
* Including all public sector companies subject or not to law No 203 for 1991.
(2/1/4) Banking Survey : Deposits in Foreign Currencies
- 144 -
End of June 2005 2006 2007 2008 2009 2010 2011Net Foreign Assets 80913 133385 218629 303680 254134 282408 253500
1- Foreign Assets 174328 218982 304968 330770 282913 322209 295480
Central Bank of Egypt 108737 129477 160197 182021 173055 198605 156331 Banks 65591 89505 144771 148749 109858 123604 139149
2- Foreign Liabilities 93415 85597 86339 27090 28779 39801 41980
Central Bank of Egypt 71443 68176 64825 1688 * 1323 8371 9134Banks 21972 17421 21514 25402 27456 31430 32846
(2/1/5) Banking Survey: Foreign Assets and Liabilities
Source: Central Bank of Egypt.
(LE mn)
* Due to the agreement between the CBE and the government, as mentioned in the footnote of table (2/1/1).
- 145 -
End of June 2005 2006 2007 2008 2009 2010 20111-Domestic Credit 466771 509532 531314 570953 695326 775268 892766
Net claims on the government (A+B-C) 159889 184131 178323 174005 273122 326141 437337
A-Securities 311375 295974 278011 271788** 397804 440410 542792
B-Credit facilities 41364 28044 52151 67732 55939 68140 98826
C-Government deposits 192850 139887 151839 165515 180621 182409 204281
Claims on public business sector * 37420 32888 24446 26897 33146 29985 32981
Claims on private business sector 228195 239338 268607 291719 304470 326350 323241
Claims on household sector 41267 53175 59938 78332 84588 92792 99207
2-Other Items (Net) -53800 -82561 -87255 -107969 -118249 -140217 -136855Capital accounts, of which : -94179 -102139 -114534 -135401 -148332 -170877 -146543
Net unclassified assets and liabilities 40379 19578 27279 27432** 30083 30660 9688
- 146 -
* Including all public sector companies subject or not to law No 203 for 1991.
(LE mn)
(2/1/6) Banking Survey: Domestic Credit / Other Items (Net)
Source: Central Bank of Egypt.
** Due to the agreement between the CBE and the government, as mentioned in the footnote of table (2/1/1).
End of June 2005 2006 2007 2008 2009 2010 2011
Total Saving Vessels 498190 560229 655376 742177 803063 794350 855132
Savings at the Banking System 404199 451082 531398 596085 648220 703419 760704
Time & saving deposits in local currency 283020 314188 377424 436268 481054 545303 583732
Demand and time & saving deposits in foreign currencies 121179 136894 153974 159817 167166 158116 176972
Net Sales of Investment Certificates 58485 63697 68311 79354 81262 90931 94428
Post Office Saving Deposits 35506 45450 55667 66738 73581 N.A N.A
- 147 -
(LE mn)
(2/1/7) Total Saving Vessels
Source: Central Bank of Egypt.
End of June 2005 2006 2007 2008 2009 2010 2011
Total 37242 32642 24188 26652 32880 29812 32688
In Local Currency 30164 26269 18097 19475 23725 21051 24560
Agriculture 16 59 7 11 3 3 105
Manufacturing 18318 16215 9071 9066 13167 9258 10167
Trade 5935 4318 3986 4114 4098 1737 918
Services 5895 5677 5033 6284 6457 10053 13370
In Foreign Currencies 7078 6373 6091 7177 9155 8761 8128
Agriculture 0 0 0 0 0 0 0
Manufacturing 5261 3752 2611 3440 4176 3294 2237
Trade 511 1556 880 709 1281 1566 934
Services 1306 1065 2600 3028 3698 3901 4957
Source: Central Bank of Egypt.
*Including all public sector companies subject or not to law No 203 for 1991.
(LE mn)
(2/1/8) Bank Lending and Discount Balances to Business Sector
Public Business Sector* - 148 -
End of June 2005 2006 2007 2008 2009 2010 2011
Total 205695 214676 239312 258087 267885 287148 284755
In Local Currency 152193 150492 163292 167258 177107 185694 187810
Agriculture 5756 4794 6922 5326 4718 4461 6294
Manufacturing 59099 55827 65453 62693 74053 76229 78448
Trade 39712 39110 33487 38342 39881 49486 36265
Services 47626 50761 57430 60897 58455 55518 66803
In Foreign Currencies 53502 64184 76020 90829 90778 101454 96945
Agriculture 619 829 929 843 2145 1534 2314
Manufacturing 20388 26072 34199 43349 41240 53355 48550
Trade 11369 12337 10944 14599 13356 13563 9508
Services 21126 24946 29948 32038 34037 33002 36573
Source: Central Bank of Egypt.
- 149 -(2/1/8) Bank Lending and Discount Balances to Business Sector (Contd.)
Private Business Sector
(LE mn)
End of June Number of Banks Operating in Egypt
Number of Branches Banking Density *
2005 52 2841 24.8
2006 43 2944 24.5
2007 41 3056 24.2
2008 39 3297 22.9
2009 39 3443 22.3
2010 39 3502 22.3
2011 39 3573 22.3
*Population in thousand / Banking unit.
(2/2/1) Structure of Egyptian Banking System
and Banking Density
Source : Central Bank of Egypt.
- 150 -
Name Registration Date Address
Al-Raghi Banking & Investment Corporation 20/10/1993 19 Adly St.,2nd Floor , Apart. 59, Cairo.
Bank of New York Mellon 27/10/1993 9 Abd El- Moneim Riad St., Dokki, Giza.
Commerz Bank AG. 31/05/1994 Building No. 2401 B, 1st Floor, Smart Village, Cairo-Alex. Highway (28 Km).
Monte dei Paschi di Siena S.P.A. 05/07/1994 10 Sarai EL- Gezeera St.,2nd Floor, Flat No. 5, Zamalek 11211,Cairo.
Union De Banques Arabes et Francaises (UBAF) 15/08/1994 4 Behlar Passage, Kasr El-Nil St., Cairo.
State Bank of India 03/10/1994 15 Kamel El-Shinnawy St., Garden City, Cairo.
Deutsche Bank AG. 10/11/1994 6 Polis Hanna St., Dokki, Giza.
Intesa SanPaolo Spa. 13/03/1995 3 Abo Elfeda St., Zamalek, Cairo.
Arab Islamic Bank 11/12/1995 21, 23 Giza St., El-Nil Tower, Giza.
JP Morgan Chase Bank N.A. 05/08/1996 3 Ahmed Nessim St., Giza
Bank of Tokyo Mitsubishi UFJ Ltd. 04/03/1997 Nile City Towers, South Tower, 10th Floor/C, Corniche El-Nil, Cairo.
UBS AG. 22/10/1997 International Trade Building, 1191 Corniche El-Nil St., 13th Floor, Cairo.
Credit Suisse AG. 16/03/1998 Nile City Towers, North Tower, Ramlah Boulak.
Wells Fargo Bank, National Association 06/05/1998 9 El-Gomhoria El-Motahida Square, Dokki,Giza.
ING Bank N.V. 12/07/1999 9 Houd El-Laban St.,Garden City, Cairo.
Credit Industriel et Commercial, CIC. 22/07/1999 28 Sherif St., Cairo.
B.H.F Bank AG. 02/08/1999 8 El-Sadd El-Aley St., Dokki, 12311, Giza.
Royal Bank Of Scotland (RBS) 17/11/1999 31 Gezirat El-Arab St., Mohandeseen, Giza.
Natixis 22/03/2000 El-Kamel Building, 54/B, Banks Zone, 6th of Oct.
Den Norske Bank 27/05/2001 19 El-Gabalaya St., Zamalek, Cairo.
Bank of Valleta Plc. 10/07/2003 7 EL-Thawra Square, 7th Floor, Flat No.71, Dokki, Giza.
Sumitomo Mitsui Banking Corporation 19/01/2004 3 Ibn Kassir, Corniche El-Nil St., 14th Floor, Flat No. 6, Giza.
Clariden Leu Ltd. 22/04/2004 4 A Hassan Sabri St., 12th Floor, Flat No. 82, Zamalek, 11211, Cairo.
Standard Chartered Bank 12/09/2005 Sheikha Fatma St., City Stars Towers, Star Capital (2), Office No. 21-22, Misr El-Gadedah, Cairo.
Egyptian Sudanese Bank 28/05/2008 4 Ahmed Basha St., 16th Floor, Garden City, Cairo.
China Development Bank Corporation 02/11/2009 41 Eighteen St. (Units 1, 2), Maadi, Cairo.
Türkiye İş Bankasi, A.Ş. 31/03/2010 Nile City Towers, North Tower, 27th Floor, Corniche El-Nil, Cairo.
Source : Central Bank of Egypt.
(2/2/2) Representation Offices Registered with the CBE (at end of June 2011)
- 151 -
Fund Name Fund Manager Par Value (LE) Net Asset Value (LE) at end of June 2010
Net Asset Value (LE) at end June 2011
Open-end Balance FundsNational Bank of Egypt I + Al Ahly Fund Management 10 37.42 37.22Banque Misr I Concord International Investments 100 102.23 97.10National Bank of Egypt II Al Ahly Fund Management 100 81.60 77.99National Bank of Egypt III HC Securities 100 74.52 66.40El Watany Bank of Egypt Hermes Fund Management 100 126.95 120.12National Bank of Egypt V Al Ahly Fund Management 10 9.21 9.25Al-Massi Hermes Fund Management 100 99.65 95.35Kheir Fund Beltone Asset Management 10 9.91 9.08
Open-end Equity FundsCredit Agricole Egypt I Hermes Fund Management 100 223.38 180.04Bank of Alexandria I Hermes Fund Management 100 214.12 171.46Arab Misr Insurance Group ++ Prime Investments Fund Management 100 148.53 137.54Banque Misr II Concord International Investment 66.67 51.77 43.79Banque de Caire Hermes Fund Management 10 51.58 42.83Export Development Bank I ( El-Khabeer) HC Securities 33.33 73.74 63.44Suez Canal Bank I HC Securities 500 290.34 252.00Credit Agricole Egypt II Hermes Fund Management 100 103.68 87.67Egyptian Gulf Bank Hermes Fund Management 100 153.60 118.55Banque Misr III HC Securities 100 406.42 358.27Shield Fund +++ Arab African Investment Management 50 103.83 102.88Misr Iran Development Bank I HC Securities 100 339.53 299.08Commercial International Bank II (Istethmar) CI Capital Asset Management 100 74.81 59.99Piraeus Bank-Egypt I Phoneix Kato Asset Management 100 93.70 92.68Housing & Development Bank (Al-Taameer) Prime Investments Fund Management 100 99.07 89.57ABC Bank Delta Rasmala 100 84.66 77.71Suez Canal Bank II (Al-Agyal) Beltone Asset Management 10 10.40 8.54Blom Bank Prime Investment 100 94.99 88.98Pharos Fund I Pharos Asset Management 100 94.48 88.91Pioneers Fund I Amual for Financial Investments 100 - 88.84Belton Traded Equity Fund (Insight) Beltone Asset Management 10 - 7.99
Open-end Fixed Income FundsCredit Agricole Egypt III Egyptian Fund Management Group 1000 1039.30 1037.44Misr Money Mareket Beltone Asset Management 10 16.20 17.46Commercial International Bank I (Osoul) CI Capital Asset Management 100 154.01 166.74Misr Iran Development Bank II HC Securities 1000 1037.12 1000.46Bank of Alexandria II EFG-Hermes 10 14.04 15.17National Bank of Egypt IV Al Ahly Fund Management 100 137.59 148.04National Societe Generale Bank (Themar) EFG-Hermes 100 134.83 145.41Export Development Bank II Delta Rasmala 100 133.55 144.14ABC Bank ( Mazaya ) Beltone Asset Management 10 10.95 11.76HSBC Egypt Bank Fund (Kol Youm) Beltone Asset Management 100 109.14 117.65AAIB( Juman) Arab African Investement Management 100 108.77 117.26Piraeus bank- Egypt II Phoneix Kato Asset Management 10 10.82 11.67Audi Bank Fund EFG-Hermes 10 10.81 11.65Banque du Caire II ( El Kahera El Youmy) Beltone Asset Management 10 10.62 11.39Blom Bank Fund II CI Capital Asset Management 100 105.40 113.89Al Watany Bank of Egypt Fund (Eshrak) NBK Capital Asset Management Egypt 10 10.32 11.10Arab Bank Fund (Youmati) Beltone Asset Management 10 10.29 11.08Housing & Development Bank (Mawared) Prime Investments Fund Management 10 10.25 11.00Bank of Alexandria III EFG-Hermes 10 10.16 10.77Prinicipal Bank for Development & Agricultural Credit (Hasad) HC Securities 10 10.15 10.88Arab Investment Bank Fund I EFG-Hermes 10 10.02 10.80Egyptian Gulf Bank Fund (Tharaa) Prime Investments Fund Management 10 - 10.21
Open-end Islamic FundsFaisal Islamic Bank EFG-Hermes 100 106.74 87.41Al Baraka Bank Egypt EFG-Hermes 100 75.60 63.89Faisal Islamic Bank - CIB (Al Amman) CI Capital Asset Management 100 57.58 44.59Banque Misr IV HC Securities 100 73.77 68.59Sanabel Fund Prime Investment Fund Management 100 80.52 73.08Egyptian Saudi Finance -National Bank of Egypt (Bashayer) Al Ahly Fund Management 100 73.22 69.87El Watany Bank of Egypt(Alhayah) El Watany Capital Asset Management 10 - 9.49Arab Investment Bank Fund II (Helal) Cairo Funds Management 100 - 100.30
Mixed Income FundsAl Rabeh Fund Prime Investment Fund Management 100 101.81 100.98
Open-end Islamic Balanced FundsAl Baraka Bank- Egypt AT. Asset Management 100 - 96.33
Closed-end FundsOrient Trust Egyptian Investment & Finance Co. 1000 1207.21 1223.14Misr Direct Investment Fund Al Ahly Development & Investment 1000 1035.00 1035.00Arab Land Direct Prime Investment Fund Management 1000 707.33 695.78
Capital Guaranteed FundsMisr Bank Capital Guaranteed Fund (El Omr) Cairo Funds Management 100 218.96 233.51
Asset Allocator FundsSociete Arab Int'l Banque I ++++ Prime Investment Fund Management 100 427.07 390.84Societe Arab Int'l Banque II Prime Investment Fund Management 100 297.59 270.22
Foreign Currency FundsMisr Money Market ($) Beltone Asset Management 10$ 10.66$ 10.70$Misr Money Market (Euro) Beltone Asset Management 10 € 10.70 € 10.75 €
Fund of FundsMisr Iran Development Bank III (Wafi) El Rashad Asset Management 10 9.88 8.92National Bank of Egypt VII El Rashad Asset Management 100 99.10 84.30
Source: Monthly Bulletin of Egyptian Exchange. + The fund's document has been split into ratio of 1: 50 as of 29/11/2007. The fund has also changed its structure from Balanced to Equity during the period (12 March 2009 - 4 February 2010).++ The document has been split into ratio of 1:5 as of 10/11/2009. +++ The name of Misr International Bank fund has changed to Shield Fund starting from 2/4/2006 and the document has been split into a ratio of 1:2 on the same date. The par value has
also changed from LE 100 to LE 50. ++++ The fund's document has been split into ratio of 1: 5 and the par value has also changed from LE 500 to LE 100 as of 29/3/2007.
(2/2/3) Local Mutual Funds Authorized and Operating as at end of June 2011
- 152 -
End of June 2005 2006 2007 2008 2009 2010 2011
Total 67753 79253 93499 112705 127912 127912 180118
Currency By Denomination+ 67527 79017 93240 112430 127625 145914 179794
PT 25 120 136 144 147 160 184 161
PT 50 220 241 240 252 309 294 303
LE 1 517 545 565 608 772 845 909
LE 5 1279 1121 1071 1169 1309 1619 2738
LE 10 5074 4274 3470 2938 2991 2930 2983
LE 20 10329 9226 8796 7394 6419 5619 9950
LE 50 24517 27959 28152 25646 23045 18836 22350
LE 100 25471 35515 47552 54987 61561 69299 73444
LE 200* 3250 19289 31059 46288 66956
Subsidiary Denominations** 226 236 259 275 287 306 324
Source: Central Bank of Egypt.
+ Including coins denominations of 50, 100 piasters.
* The LE 200 note has been in circulation as of May 2007.
** Issued by the Ministry of Finance.
(2/3/1) Note Issued by Denomination
(LE mn)
- 153 -
End of June 2005 2006 2007 2008 2009 2010 2011
Total 67236 78604 92175 111412 126268 144254 179096
Subsidiary Coins & Notes* 226 236 259 275 287 306 324
PT 25 118 135 142 145 158 184 161
PT 50 217 239 234 242 308 293 302
LE 1 512 540 550 591 770 843 907
LE 5 1251 1095 987 1105 1257 1495 2654
LE 10 4999 4215 3323 2845 2911 2844 2886
LE 20 10246 9128 8553 7194 6297 5480 9672
LE 50 24348 27737 27967 25422 22898 18704 22246
LE 100 25319 35279 47136 54529 60867 68641 73269
LE 200+ 3024 ـــ ـــ 19064 30515 45464 66675
Source: Central Bank of Egypt.
* Issued by the Ministry of Finance.
+ The LE 200 note has been in circulation as of May 2007.
(2/3/2) Currency in Circulation Outside CBE by Denomination
(LE mn)
- 154 -
During FY 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011
Local Currency Transactions via RTGS*
1- Automated Clearing House (ACH)
Number of transactions (thousand) 9508 10481 11724 12062 12994 13012
Value of transactions (LE mn) 288715 356900 483113 548038 584546 626757
2- Other Transactions via RTGS**
Number of transactions (in unit) 404776 525236 700668 897205 1191374 1248692
Value of transactions (LE mn) 1658794 2280198 3092401 5294357 13274677 15879701
Foreign Currency Transfers (Dollar Interbank Transactions) via the Fin-Copy System***
Number of transactions (in unit) 11049 12070 13925 12365 12204 15066
Value of transactions (US$ mn) 39773 78997 105587 83019 70008 88052
* The RTGS was launched on 15 /3/ 2009.
** Including corridor operations and deposits for monetary policy purposes as of 15/3/2009.
*** This service was introduced on 19/ 9/ 2004.
(2/3/3) CBE: Transactions via RTGS and SWIFT
- 155 -
End of June 2005 2006 2007 2008 2009 2010 2011
Assets
Cash 6594 6813 7705 10261 11128 12448 14830Securities & investments in TBs of which: 170659 193965 176098 201858 332597 405895 474176
CBE notes - 21563 17617 - - - -
Balances with banks in Egypt, of which: 124986 121695 217363 278185 173482 200719 117010
Loans and discounts NA 413 946 1307 775 729 885
Balances with banks abroad, of which: 51204 72554 124366 122792 77120 57371 96080
Loans and discounts NA 1273 2836 2448 1869 2004 1398
Loan and discount balances 308195 324041 353746 401425 429957 465990 474139
Other assets 41990 42494 58645 68790 67709 78232 93455
Assets =Liabilities 703628 761562 937923 1083311 1091993 1220655 1269690LiabilitiesCapital 22949 27112 33037 37576 41550 46598 59049
Reserves 12419 13418 12552 19763 21371 28486 22056
Provisions 49541 54950 53469 62314 69748 70418 55106
Long-term loans & bonds 14254 17526 26351 22285 22045 21697 26180
Obligations to banks in Egypt 22671 21488 82619 98699 31004 53881 28171
Obligations to banks abroad 12262 8770 10006 13327 18195 20305 15168
Total deposits 519649 568841 649953 747199 809694 892492 957037
Other liabilities, of which: 49883 49457 69936 82148 78386 86778 106923
Cheques payable 2683 2973 5801 4450 3576 4764 5143
- 156 -
Source : Central Bank of Egypt.
(2/4/1) Banks : Aggregate Financial Position
( LE mn )
End of June 2005 2006 2007 2008 2009 2010 2011
Total Deposits 519649 568841 649953 747199 809694 892492 957037
Demand deposits 51557 62431 78759 100569 102853 119518 130087
Time & Saving deposits and saving accounts 445132 479805 542982 612737 673048 738650 789407
Blocked or retained deposits 22960 26605 28212 33893 33793 34324 37543
First: Local Currency Deposits 369067 401143 463320 552079 598587 686052 724878
Demand deposits 31606 41793 50366 71971 69262 84152 86967
Time & Saving deposits and saving accounts 324664 345953 396351 460285 509156 580020 615839
Blocked or retained deposits 12797 13397 16603 19823 20169 21880 22072
Second: Foreign Currency Deposits 150582 167698 186633 195120 211107 206440 232159
Demand deposits 19951 20638 28393 28598 33591 35366 43120
Time & Saving deposits and saving accounts 120468 133852 146631 152452 163892 158630 173568
Blocked or retained deposits 10163 13208 11609 14070 13624 12444 15471
- 157 -
Source : Central Bank of Egypt.
(2/4/2) Banks : Deposits by Maturity
( LE mn )
End of June 2005 2006 2007 2008 2009 2010 2011
Total Deposits 519649 568841 649953 747199 809694 892492 957037
Local Currency Deposits 369067 401143 463320 552079 598587 686052 724878
Government sector 57649 49422 37233 44789 49564 58496 56728
Public business sector * 16727 20399 23464 29434 28800 32726 29278
Private business sector 39668 41444 77504 119716 104250 114372 103965
Household sector 253865 287973 321793 354119 413558 477842 532032
External sector ** 1158 1905 3326 4021 2415 2616 2875
Foreign Currency Deposits 150582 167698 186633 195120 211107 206440 232159
Government sector 27252 29290 30329 33203 41481 45618 51403
Public business sector * 4195 5668 6721 9146 8735 6474 7549
Private business sector 31337 39263 49093 57202 58321 54907 60241
Household sector 85813 92174 98331 93653 100210 96875 109248
External sector ** 1985 1303 2159 1916 2360 2566 3718
Source : Central Bank of Egypt.
* Including all public sector companies subject or not to Law No 203 for 1991.
** Including counterpart deposits of USAID
(2/4/3) Banks : Deposits by Sector - 158 -
( LE mn )
End of June 2005 2006 2007 2008 2009 2010 2011Total Deposits 519649 568841 649953 747199 809694 892492 957037
Local Currency Deposits 369067 401143 463320 552079 598587 686052 724878
Agriculture 2548 2215 2531 5673 6323 5072 3792
Manufacturing 19239 19903 23819 36169 37537 38302 38119
Trade 11740 12793 18354 23928 20850 27829 24304
Services 31915 38245 40529 59337 53846 64895 62311
Unclassified sectors 303625 327987 378087 426972 480031 549954 596352
Foreign Currency Deposits 150582 167698 186633 195120 211107 206440 232159
Agriculture 831 855 467 1002 904 930 771
Manufacturing 15274 18159 21208 26223 27757 23772 24876
Trade 6583 8250 11824 10263 12046 11065 14182
Services 17499 21602 23216 30202 25848 25767 28529
Unclassified sectors 110395 118832 129918 127430 144552 144906 163801
Source : Central Bank of Egypt.
( LE mn )
(2/4/4) Banks : Deposits by Economic Activity
- 159 -
End of June 2005 2006 2007 2008 2009 2010 2011
Total 170659 172402 158481 201858 332597 405895 474176
In Local Currency 139322 140840 125981 168182 297194 338834 442648
Government sector 118358 115146 96652 135129 262044 303297 407814
Public business sector * 666 859 761 1414 1338 1052 980
Private business sector 20298 24835 28568 31609 33755 34394 33764
Household sector - - - - - - -
External sector - - - 30 57 91 90
In Foreign Currencies 31337 31562 32500 33676 35403 67061 31528
Government sector 16594 16067 14636 13536 14051 15579 4382
Public business sector * - - - - - - -
Private business sector 4711 3545 3474 4914 5532 5597 5475
Household sector - - - - - - -
External sector 10032 11950 14390 15226 15820 45885 21671
Source : Central Bank of Egypt.
+ Excluding CBE Notes.* Including all public sector companies subject or not to law No 203 for 1991.
- 160 -
(2/4/5) Banks : Portfolio Investments by Sector+
( LE mn )
End of June 2005 2006 2007 2008 2009 2010 2011Total 308195 324041 353746 401425 429957 465990 474139
In Local Currency 233141 238926 248544 267166 295192 313654 327764
Government sector 10938 11285 10788 9698 12946 15389 18191
Public business sector * 30164 26269 18097 19475 23725 21051 24560
Private business sector 152193 150491 163292 167258 177107 185694 187810
Household sector 39354 50158 55453 69838 78827 90266 96112
External sector 492 723 914 897 2587 1254 1091
In Foreign Currencies 75054 85115 105202 134259 134765 152336 146375
Government sector 11080 9712 15896 21460 17802 23995 21611
Public business sector * 7078 6373 6091 7177 9155 8761 8128
Private business sector 53502 64184 76020 90829 90778 101454 96945
Household sector 1913 3017 4485 8494 5762 2526 3095
External sector 1481 1829 2710 6299 11268 15600 16596
Source : Central Bank of Egypt.
* Including all public sector companies subject or not to law No 203 for 1991.
(2/4/6) Banks : Lending and Discount Balances by Sector
( LE mn )
- 161 -
End of June 2005 2006 2007 2008 2009 2010 2011Total 478854 496443 512227 603283 762554 871885 948315
In Local Currency 372463 379766 374525 435348 592386 652488 770412
Government sector 129296 126431 107440 144827 274990 318686 426005
Public business sector * 30830 27128 18858 20889 25063 22103 25540
Private business sector 172491 175326 191860 198867 210862 220088 221574
Household sector 39354 50158 55453 69838 78827 90266 96112
External sector 492 723 914 927 2644 1345 1181
In Foreign Currencies 106391 116677 137702 167935 170168 219397 177903
Government sector 27674 25779 30532 34996 31853 39574 25993
Public business sector * 7078 6373 6091 7177 9155 8761 8127
Private business sector 58213 67729 79494 95743 96310 107051 102420
Household sector 1913 3017 4485 8494 5762 2526 3095
External sector 11513 13779 17100 21525 27088 61485 38268
Source : Central Bank of Egypt.
* Including all public sector companies subject or not to law No 203 for 1991.
(2/4/7) Banks : Credit by Sector
( LE mn )
- 162 -
End of June 2005 2006 2007 2008 2009 2010 2011Total 308195 324041 353746 401425 429957 465990 474139
In Local Currency 233141 238926 248544 267166 295192 313654 327764
Agriculture 5822 4902 6986 5758 5137 4856 6800
Manufacturing 81844 77734 80497 76793 94674 94810 100646
Trade 45648 43564 37476 42456 44079 51241 37186
Services 59870 61679 67035 71208 69766 70931 85578
Unclassified sectors 39957 51047 56550 70951 81536 91816 97554
In Foreign Currencies 75054 85115 105202 134259 134765 152336 146375
Agriculture 619 829 929 863 2165 1554 2314
Manufacturing 34957 38517 51399 67690 61808 79423 70744
Trade 11893 13930 11837 15319 14646 15134 10445
Services 24188 26983 33842 35594 39117 38084 43180
Unclassified sectors 3397 4856 7195 14793 17029 18141 19692
Source : Central Bank of Egypt.
(2/4/8) Banks : Lending and Discount Balances by Economic Activity
( LE mn )
- 163 -
More than one-month and less than or
equal to three-month
deposits
More than three-month and less than
or equal to six-month deposits
More than six-month
and less than or equal to one year deposits
Less than or equal
to one year loans
SimpleReturn
Of increasingcertificate value
January 2009 11.50 7.30 7.60 8.30 12.60 10.00 9.50 9.50
February 10.50 7.30 7.60 8.30 12.60 ,, ,, ,,
March 10.00 7.10 7.50 8.30 12.40 ,, ,, ,,
April ,, 7.00 7.30 8.20 12.30 ,, ,, ,,
May 9.50 6.70 7.10 7.90 12.30 ,, ,, ,,
June 9.00 6.50 7.00 7.80 12.10 ,, ,, ,,
July ,, 6.20 6.90 7.50 12.10 ,, ,, 9.00
August 8.50 6.10 6.60 7.30 12.00 ,, ,, ,,
September ,, 6.00 6.50 7.10 11.60 9.50 9.00 ,,
October ,, 5.90 6.40 6.90 11.40 ,, ,, ,,
November ,, 5.90 6.30 6.80 11.30 ,, ,, ,,
December ,, 5.90 6.30 6.70 11.00 ,, ,, ,,
January 2010 ,, 5.90 6.40 6.70 11.10 ,, ,, ,,
February ,, 5.90 6.40 6.70 11.00 ,, ,, ,,
March ,, 6.00 6.40 6.70 11.10 ,, ,, ,,
April ,, 6.00 6.40 6.70 11.10 ,, ,, ,,
May ,, 5.90 6.50 6.80 11.20 ,, ,, ,,
June ,, 6.30 6.90 7.30 11.10 ,, ,, ,,
July ,, 6.30 6.90 7.20 11.10 ,, ,, ,,
August ,, 6.30 6.90 7.20 10.90 ,, ,, ,,
September ,, 6.40 7.00 7.20 10.90 ,, ,, ,,
October ,, 6.60 6.90 7.30 11.00 ,, ,, ,,
November ,, 6.60 6.90 7.30 10.90 ,, ,, ,,
December ,, 6.60 6.90 7.20 10.70 ,, ,, ,,
January 2011 ,, 6.50 6.90 7.30 10.70 ,, ,, ,,
February ,, 6.50 6.90 7.20 10.60 ,, ,, ,,
March ,, 6.50 6.90 7.30 10.70 ,, ,, ,,
April ,, 6.60 6.90 7.30 10.80 ,, ,, ,,
May ,, 6.70 6.90 7.40 10.80 ,, ,, ,,
June ,, 6.60 6.90 7.40 11.00 ,, ,, ,,
Source: Central Bank of Egypt and the Egyptian National Post Authority.
* As of June 2010, maturities have been changed and the data on interest rates (on deposits and loans) have been compiled according to the Domestic Money Monitoring System (DMMS).
(2/5/1) Discount and Interest Rates on Deposits and Loans
End of Discount Rate
- 164 -
(% Annually)
Interest rate on Post Office Saving
Deposits*
Average Interest Rate in Banks * Interest Rate on Investment Certificates
in Egyptian Pound
US Dollar Sterling Pound Euro
Min. Max. Min. Max. Min. Max.
January 2009 0.83 1.03 0.92 1.17 1.13 1.38February 0.90 1.10 0.82 1.07 0.86 1.11March 0.88 1.08 0.47 0.72 0.55 0.80April 0.69 0.89 0.62 0.87 0.63 1.13May 0.31 0.51 0.43 0.68 0.52 1.02June 0.41 0.61 0.62 0.87 0.66 1.16July 0.29 0.49 0.31 0.56 0.33 0.83August 0.18 0.38 0.15 0.35 0.26 0.76September 0.12 0.29 0.15 0.22 0.16 0.66October 0.13 0.28 0.15 0.41 0.20 0.54November 0.12 0.26 0.15 0.43 0.20 0.54December 0.11 0.25 0.15 0.42 0.20 0.53
January 2010 0.11 0.24 0.15 0.43 0.18 0.49February 0.11 0.25 0.16 0.45 0.18 0.48March 0.13 0.28 0.16 0.45 0.17 0.47April 0.15 0.32 0.17 0.46 0.18 0.47May 0.24 0.53 0.18 0.50 0.19 0.51June 0.24 0.53 0.18 0.51 0.20 0.53July 0.21 0.47 0.19 0.52 0.25 0.66August 0.14 0.30 0.18 0.50 0.25 0.66September 0.13 0.28 0.18 0.51 0.25 0.66October 0.13 0.28 0.18 0.52 0.29 0.78November 0.13 0.28 0.18 0.52 0.29 0.78December 0.14 0.30 0.19 0.53 0.28 0.75
January 2011 0.14 0.30 0.19 0.54 0.30 0.79February 0.14 0.31 0.20 0.56 0.31 0.83March 0.14 0.30 0.20 0.57 0.35 0.93April 0.12 0.27 0.20 0.57 0.40 1.06May 0.11 0.25 0.21 0.58 0.41 1.11June 0.11 0.24 0.21 0.58 0.44 1.18
Source: National Bank of Egypt.
End of
- 165 -
(2/5/2) Domestic Interest Rates on 3-Month Depositsin Major Currencies
( % Annually )
(%)
91 days 182 days 252 days 259 days 266 days 273 days 280 days 343 days 350 days 357 days 364 days 371 days
April 2011
First week (5/4) 11.103 11.950 0.000 0.000 0.000 12.173 0.000 0.000 0.000 0.000 12.475 0.000Second week (12/4) 11.079 11.923 0.000 0.000 12.228 0.000 0.000 0.000 0.000 12.513 0.000 0.000Third week (19/4) 11.185 11.921 0.000 12.376 0.000 0.000 0.000 0.000 12.584 0.000 0.000 0.000Fourth week (26/4) 11.348 12.203 0.000 0.000 0.000 12.518 0.000 0.000 0.000 0.000 12.787 0.000 Monthly Average 11.179 11.999 0.000 12.376 12.228 12.346 0.000 0.000 12.584 12.513 12.631 0.000
May 2011First week (3/5) 11.445 12.437 0.000 0.000 0.000 12.658 0.000 0.000 0.000 12.821 0.000 0.000
Second week (10/5) 11.564 12.558 0.000 0.000 12.762 0.000 0.000 0.000 12.878 0.000 0.000 0.000Third week (17/5) 11.603 12.548 0.000 12.856 0.000 0.000 0.000 12.917 0.000 0.000 0.000 0.000Fourth week (24/5) 11.616 12.605 12.869 0.000 0.000 0.000 0.000 0.000 0.000 0.000 12.938 0.000 (31/5) 11.561 12.589 0.000 0.000 0.000 12.865 0.000 0.000 0.000 12.946 0.000 0.000
Monthly Average 11.558 12.547 12.869 12.856 12.762 12.762 0.000 12.917 12.878 12.884 12.938 0.000
June 2011First week (7/6) 11.598 12.581 0.000 0.000 12.866 0.000 0.000 0.000 12.960 0.000 0.000 0.000Second week (14/6) 11.602 12.593 0.000 12.903 0.000 0.000 0.000 0.000 0.000 0.000 12.969 0.000Third week (21/6) 11.761 12.643 0.000 0.000 0.000 12.944 0.000 0.000 0.000 12.980 0.000 0.000Fourth week (28/6) 12.095 12.791 0.000 0.000 12.981 0.000 0.000 0.000 12.982 0.000 0.000 0.000
Monthly Average 11.764 12.652 0.000 12.903 12.924 12.944 0.000 0.000 12.971 12.980 12.969 0.000
Source: Central Bank of Egypt.
(2/5/3) Interest Rates on Treasury Bills (Weekly Weighted Averages)
- 166 -
End of June 2005 2006 2007 2008 2009 2010 2011+
Number of Companies (in Unit) 770 656 544 377 333 215 211On the Official Schedules 132 141 147 121 119 115 0On the Unofficial Schedules 612 503 394 255 213 100 0On the Temporary Schedule* 26 12 3 1 1 0 0
Number of Shares (mn) 6985 10457 14993 19859 22430 29002 32364Nominal Value of Capital (LE mn) 108209 109165 121072 137974 149587 134748 144699
Market Value of Capital (LE mn) 337059 377070 601826 813341 463644 410144 399756
The Market of Medium and Small Enterprises (Nilex)**
Number of Companies (in Unit) 10 18
Number of Listed Shares (mn) 49 152
Total Value of Traded Shares (LE mn) 83 14
Market Value of Capital (LE mn) 407 1007
The Egyptian Exchange Indices***
EGX 20 Capped 4519.1 5719.5 9286.2 10716.2 6590.8 6925.6 5888.1EGX 30 4828.7 4772.8 7803.4 9827.3 5702.9 6033.1 5373.0EGX 70 623.1 527.7 629.6
EGX 100 908.7 972.9
Source: Monthly Bulletin of Egyptian Exchange.
* Companies which have not adjusted their statuses according to the new listing rules.
** Trading in the Nilex Started on 3/6/2010.
+ The scheduling of the number of companies has been amended according to the EFSA's BOD decision no. 50 for 2009 regarding the listing and de-listing rules of securities on the Egyptian Exchange. A time was given for companies to readjust their status.
active 20 companies listed on the Egyptian Exchange . The index was computed as of the 1st of February 2003.
70 companies other than the 30 constituent companies of EGX 30. EGX 100 was also introduced, encompassing those companies constituting EGX 30 and EGX 70, as of August 2009.EGX 20 Capped was also introduced in October 2011, which includes the most
- 167 -
*** The Egyptian Exchange CASE 30 Index was renamed EGX 30, while the EGX 70 index was introduced as of March 2009 to cover
(3/1) Companies Listed on the Egyptian Exchange
During FY
Number of Transactions
(Unit)
Amount(Thousand)
Market Value(mn)
Number of Transactions
(Unit)
Amount(Thousand)
Market Value(mn)
In Egyptian Pound 11788386 31752703 372693 7003133 22568747 146656
Floor Transactions 11062889 24336192 253432 6921524 20465398 132939
Over the Counter Trading 725497 7416511 119261 81609 2103349 13717
In Foreign Currencies (US Dollar) 326727 1077180 3593 147376 599556 1423
Floor Transactions 318742 979575 1959 145282 537349 830
Over the Counter Trading 7985 97605 1634 2094 62207 593
In Foreign Currencies (Euro) 26 3388 88 9 265 36
Floor Transactions 0 0 0 0 0 0
Over the Counter Trading 26 3388 88 9 265 36
-168 -
2009/2010
(3/2) Trading in Shares on the Egyptian Exchange
2010/2011
Source : Egyptian Financial Supervisory Authority (EFSA) - Monthly Report of the Capital Market.
During FY Number of
Transactions Amount Market Value Number of Transactions Amount Market Value
(Thousand) (Thousand)
In Egyptian Pound 1218 46492990 47889797 1558 45139785 45114731
Floor Transactions 1218 46492990 47889797 1558 45139785 45114731
Over the Counter Trading 0 0 0 0 0 0
In US Dollar 0 0 0 0 0 0
Floor Transactions 0 0 0 0 0 0
Over the Counter Trading 0 0 0 0 0 0
2009/2010
(Unit) (Unit)
2010/2011
Source : Egyptian Financial Supervisory Authority (EFSA) - Monthly Report of the Capital Market.
(3/3) Trading in Bonds on the Egyptian Exchange
- 169 -
During FY
Egyptian PoundForeign
Currencies (US$)
Egyptian PoundForeign
Currencies (US$)
Net Number of Transactions (Unit) 131934 6747 57000 3731Purchases 1055605 47196 870112 32561Sales 923671 40449 813112 28830
Net Volume of Securities (mn) 346 30 42 7Purchases 4241 243 3726 123Sales 3895 213 3684 116
Net Value of Securities (mn) 5004 106 2070 -15Purchasers 64421 580 44104 217Sales 59417 474 42034 232
- 170 -
2009/2010 2010/2011
Source : Egyptian Financial Supervisory Authority (EFSA) - Monthly Report of the Capital Market.
(3/4) Foreigners' Transactions on the Egyptian Exchange
Jun-10 Jun-11 Jun-10 Jun-11
Comercial International Bank/Egypt (CIB) July-96 Bank of New York CIB/HSBC 1.00 9999 12.20 5.06 67.55 29.76Suez Cement July-96 Bank of New York CIB/HSBC 1.00 7310 5.80 7.50 35.73 39.25Paints & Chemicals Industries (Pachin) Oct.-97 Bank of New York CIB/HSBC 3.00 6297 2.80 2.80 48.50 38.42EFG-Hermes Aug.-98 Bank of New York HSBC/CIB 0.50 4324 11.10 6.84 29.20 20.10El Ezz Steel Rebars June-99 Bank of New York CIB/HSBC 0.33 573 32.50 32.50 17.58 10.61Holding Company for Financial Investments (Lakah Group)* July-99 Bank of New York CIB/HSBC 0.33 35000 0.44 0.44 - -Orascom Telecom Holding (OT)** July-00 Bank of New York CIB/HSBC 0.20 11713 4.40 3.46 4.98 4.08Orascom Construction Industries (OCI)*** Aug.-02 Bank of New York CIB/HSBC 1.00 50 38.70 45.95 227.44 269.64Egypt Lebanon Ceramics (Lecico) Nov.-04 Bank of New York CIB/HSBC 1.00 8796 3.00 4.10 13.02 15.08Telecom Egypt Dec.-05 Bank of New York CIB/HSBC 0.20 8522 15.50 12.69 15.74 14.93Naeem Holding Feb-08 Bank of New York CIB/HSBC 0.25 5625 1.72 1.44 0.43 0.36Palm Hills Development May-08 Bank of New York CIB/HSBC 0.20 5435 4.70 5.30 4.89 2.33
G.B. Auto May-09 Bank of New York CIB 0.20 100 34.43 25.52 39.22 30.46
Ramco for Constructing touristic Villages May-10 JP Morgan HSBC 0.20 1000 - - 3.90 3.35Source: Monthly Bulliten of Egyptian Stock Exchange. * Last closing price was on 3 March 2005 as no trading has occurred after this date.** The conversion ratio has changed to be 5 shares : 1 GDR, effective 12 April 2007.*** The conversion ratio has changed to be 1 shares : 1 GDR, effective 7 May 2009.
Price (LE) at end of Conversion
Ratio
- 171 -
GDRs Listed on Global Exchanges Corporate Stocks
Issued on EgyptianExchange
Depository Bank Sub
CustodianBank
Volume on Offering
Date (000s)Company Date of
Offering
Price ($) at end of
(3/5) Global Depository Receipts (GDRs)
(LE mn)
End of 91 days 182 days 252 days 259 days 266 days 273 days 280 days 343 days 350 days 357 days 364 days 371 days Total
2005
March 0 34550 - - - - - - - - 82358 - 116908
June 2750 23900 - - - - - - - - 98257 - 124907
Sept. 8900 22350 - - - - - - - - 71726 - 102976
Dec. 5500 22600 - - - - - - - - 67816 - 95916
2006
March 6000 24100 - - - - - - - - 69016 - 99116
June 7100 26500 - - - - - - - - 69544 - 103144
Sept. 9900 27500 - - - - - - - - 69957 - 107357
Dec. 8200 27000 - - - - - - - - 71157 - 106357
2007
March 11000 26000 - - - - - - - - 73657 - 110657
June 9000 27500 - - - - - - - - 82157 - 118657
Sept. 8500 31500 - - - - - - - - 90657 - 130657
Dec. 12000 33000 - - - - - - - - 100957 - 145957
2008
March 10500 32500 - - - - - - - - 106457 - 149457
June 6800 33000 - - - - - - - - 106639 - 146439
Sept. 17000 42500 - - - - - - - - 105940 - 165440
Dec. 14500 48500 - - - 28000 - - - - 114940 - 205940
2009
March 9500 51500 - - - 55500 - - 6000 - 97940 - 220440
June 6021 43119 - 6000 - 77500 - - 15000 3000 88440 - 239080
Sept. 11000 28990 - 6000 - 88500 - - 18000 15000 82890 - 250380
Dec. 8480 32767 - 6000 10025 79442 - - 18000 32419 64618 - 251751
2010
March 20000 47264 6000 - 16025 69442 - - 19000 39419 68118 - 285268
June 13000 46867 6000 3000 27025 45442 - - 15000 45169 64618 - 266121Sept. 19000 45000 15000 3000 26000 39000 - - 21000 42169 58618 - 268787Dec. 9975 54250 12000 3000 27500 42500 3500 - 31500 38250 59390 - 281865
2011
March 22500 71250 15000 7000 28500 39000 3500 - 31500 41750 56890 3500 320390
June 33000 78000 7325 16500 30250 41866 3500 2785 36840 43552 58985 3500 356103
- 172 -
(3/6) Outstanding Balance of Treasury Bills (Quarterly)
Source : Central Bank of Egypt.
(LE mn)
91 days 182 days 252 days 259 days 266 days 273 days 280 days 343 days 350 days 357 days 364 days 371 days Total
April 2011First week (5/4) 23000 71250 12000 7000 25500 39500 3500 0 31500 41750 60390 3500 318890Second week (12/4) 23000 71750 12000 7000 29000 39500 3500 0 28500 42250 57390 3500 317390Third week (19/4) 23500 72250 12000 10000 29000 39500 3500 0 32000 42250 57390 3500 324890Fourth week (26/4) 24000 72750 12000 10000 29000 43000 3500 0 32000 42250 58890 3500 330890
End of Month 24000 72750 12000 10000 29000 43000 3500 0 32000 42250 58890 3500 330890
May 2011
First week (3/5) 25500 72750 9000 10000 26000 42600 3500 0 32000 44125 58890 3500 327865Second week (10/5) 20000 73250 9000 10000 29500 42600 3500 0 32850 43375 57390 3500 324965Third week (17/5) 19000 73250 9000 13500 29500 42600 3500 2785 32850 43375 57390 3500 330250Fourth week (24/5) 19500 73750 10325 13500 29500 42600 3500 2785 32850 43375 59665 3500 334850
(31/5) 20000 73750 7325 13500 26500 42075 3500 2785 32850 46664 59665 3500 332114
End of Month 20000 73750 7325 13500 26500 42075 3500 2785 32850 46664 59665 3500 332114
June 2011
First week (7/6) 21000 74750 7325 13500 29500 42075 3500 2785 35740 44664 56665 3500 335004Second week (14/6) 22500 76750 7325 16500 29500 42075 3500 2785 35740 44664 59985 3500 344824Third week (21/6) 24000 77750 7325 16500 29500 44866 3500 2785 35740 43552 58985 3500 348003
Fourth week (28/6) 33000 78000 7325 16500 30250 41866 3500 2785 36840 43552 58985 3500 356103
End of Month 33000 78000 7325 16500 30250 41866 3500 2785 36840 43552 58985 3500 356103
Source: Central Bank of Egypt.
- 173 -
(3/7) Outstanding Balance of Treasury Bills (Weekly)
Tranche Date of Value Interest Maturity &
Issue (LE bn) Rate% Due Date
Bonds under the Primary Dealers System **
Eleventh 26/10/2004 5.0 11.500 7 years 26/10/2011
Twelveth 16/11/2004 5.0 11.625 10 years 16/11/2014
Fourteenth 18/01/2005 1.0 11.400 20 years 18/01/2025
Eighteenth 20/09/2005 6.0 9.100 7 years 20/09/2012
Twenty First 15/11/2005 5.0 9.300 10 years 15/11/2015
Twenty Third 24/01/2006 6.0 8.850 7 years 24/01/2013
Twenty Seventh 29/05/2007 2.0 9.450 7 years 29/05/2014
Twenty Eighth 25/09/2007 2.0 8.450 7 years 25/09/2014
Twenty Ninth 23/10/2007 2.0 8.600 8 years 23/10/2015
Thirtieth 13/11/2007 5.0 8.550 6 years 13/11/2013
Thirty First 22/01/2008 3.0 8.700 8 years 22/01/2016
Thirty Second 12/02/2008 1.5 9.150 10 years 12/02/2018
Thirty Third 19/02/2008 3.0 9.200 6 years 19/02/2014
Thirty Fourth 27/05/2008 3.0 10.650 7 years 27/05/2015
Thirty Fifth 10/06/2008 2.0 10.950 8 years 10/06/2016
Thirty Sixth 13/01/2009 6.0 12.000 3 years 13/01/2012
Thirty Seventh 10/02/2009 6.0 12.000 5 years 10/02/2014
Thirty Eighth 14/04/2009 5.0 10.550 5 years 14/04/2014
Thirty Nineth 28/04/2009 6.0 10.350 3 years 28/04/2012
Fortieth 09/06/2009 6.0 11.000 7 years 09/06/2016
Fourty First 07/07/2009 3.5 10.600 2 years 07/07/2011
Fourty Second 28/07/2009 6.0 10.800 4 years 28/07/2013
Fourty Third 11/08/2009 6.0 10.450 3 years 11/08/2012
Fourty Fourth 15/09/2009 5.1 10.900 5 years 15/09/2014
Fourty Fifth 29/09/2009 6.0 10.900 4 years 29/09/2013
Fourty Sixth 24/11/2009 2.0 12.170 4 years 24/11/2013
Fourty Seventh 08/12/2009 6.5 12.500 5 years 08/12/2014
Fourty Eighth 15/12/2009 5.1 12.800 6 years 15/12/2015
Fourty Nineth 05/01/2010 8.0 12.350 3 years 05/01/2013
Fiftieth 16/02/2010 13.5 12.600 7 years 16/02/2017
Fifty First 02/03/2010 10.0 12.250 5 years 02/03/2015
Fifty Second 06/04/2010 9.5 11.350 3 years 06/04/2013
Fifty Third 06/07/2010 10.0 11.550 3 years 06/07/2013
Fifty Fourth 20/07/2010 7.5 12.550 5 years 20/07/2015
Fifty Fifth 03/08/2010 5.5 13.000 10 years 03/08/2020
Fifty Sixth 05/10/2010 11.5 11.600 3years 05/10/2013
Fifty Seventh 19/10/2010 7.5 12.350 5 years 14/09/2015Fifty Eighth 18/01/2011 3.0 11.630 3years 18/01/2014
Total 206.7
* According to Law No. (4) for 1995.
** This system was put into force as of July 2004, in virtue of the Minister of Finance's Decree No. 480 for 2002 and the provisions governing
it, issued by the Minister of Finance's Decree No. 723 for 2002, in accordance with the provisions of Article ( 7) of Law No. 92 for 2004.
(3/8) Outstanding Balance of Treasury Bonds*
End of June 2011
Duration
- 174 -
( LE mn )
The Budget Sector
The Budget Sector, NIB
& SIFs
The Budget Sector
The Budget Sector, NIB
& SIFs
Total Expenditures 282290 305795 351500 356944Compensation of Employees 62839 63531 76147 76968
Salaries and wages 51172 51809 62658 63412Social contributions 6165 6214 7210 7276Other 5502 5508 6279 6280
Purchases of Goods and Services 18470 18790 25072 25203Goods 7272 7287 11404 11418Services 7625 7698 9805 9859Other 3573 3805 3863 3926
Interests 50528 40956 52810 43755Foreign interests 3737 3737 3598 3598Domestic interests 46791 37219 49212 40157
To NIB & SIFs 17854 0 18615 0To others 28937 37219 30597 40157
Subsidies, Grants and Social Benefits 92371 124249 127033 140262
Subsidies 84205 84205 93830 93830
To GASC 16445 16445 21072 21072To petroleum 60249 60249 62703 62703To others 7511 7511 10055 10055
Grants 3890 3890 4213 4213Social Benefits 4050 35928 28707 41936
Contribution to SIFs 2600 0 26805 0Other 1450 35928 1902 41936
Other 226 226 283 283Other Expenditures 23891 23972 27008 27276
Defense 19849 19849 22267 22267Other 4042 4123 4741 5009
Purchases of Non-Financial Assets(Investments) 34191 34297 43430 43480
Fixed assets 28186 28292 34654 34704Others 6005 6005 8776 8776
Source: The Ministry of Finance .
2007/2008 2008/2009
- 175 -
(4/1) Consolidated Fiscal Operations of the General Government ( The Budget Sector, NIB and SIFs )
(Total Expenditures)
( LE mn )
The Budget Sector
The Budget Sector, NIB
& SIFs
The Budget Sector
The Budget Sector, NIB
& SIFs
Total Expenditures 365987 396768 392097 430641Compensation of Employees 85369 86377 95082 96369
Salaries and wages 70321 71247 77643 78750Social contributions 7850 7918 9098 9186Other 7198 7212 8341 8433
Purchases of Goods and Services 28059 28244 23785 24283Goods 11967 11986 9734 9753Services 11442 11560 10366 10542Other 4650 4698 3685 3988
Interests 72333 62277 81081 72366Foreign interests 2840 2840 3416 3416Domestic interests 69493 59437 77664 68950
To NIB &SIFs 19044 0 19140 0To others 50449 59437 58525 68950
Subsidies, Grants and Social Benefits 102975 142360 122834 167974Subsidies 93570 93570 111023 111023
To GASC 16819 16819 32743 32743To petroleum 66524 66524 67680 67680To others 10227 10227 10599 10599
Grants 4380 4380 5314 5314Social Benefits 4483 43868 6033 51173
Contribution to SIFs 2400 0 3438 0Other 2083 43868 2595 51173
Other 542 542 465 465Other Expenditures 28901 29047 31363 31552
Defense 23453 23453 26484 26484Other 5448 5594 4879 5068
Purchases of Non-Financial Assets(Investments) 48350 48463 37952 38097
Fixed assets 39205 39319 33266 33411Others 9145 9144 4686 4686
Source: The Ministry of Finance .
2009/2010 2010/2011
- 176 -
(4/1) Consolidated Fiscal Operations of the General Government (Contd.)( The Budget Sector, NIB and SIFs )
(Total Expenditures)
( LE mn )
The Budget Sector
The Budget Sector, NIB
& SIFs
The Budget Sector
The Budget Sector, NIB
& SIFs
Total Revenues 221404 248835 282505 288545Tax Revenues 137195 137195 163222 163222
Taxes on Income, Profits 67059 67059 79073 79073From EGPC 29268 29268 34135 34135From SCA 10268 10268 10391 10391From CBE 0 0 0 0From other units 16028 16028 20263 20263Payable by individuals 11495 11495 14284 14284
Taxes on Property 2052 2052 3944 3944Taxes on Goods and Services 49747 49747 62650 62650Taxes on International Trade 14020 14020 14091 14091Other Taxes 4317 4317 3464 3464
Grants 1463 1463 7984 7984Current 436 436 6480 6480
Capital 1027 1027 1504 1504Other Revenues 82746 110177 111299 117339
Property Income 52455 59308 53395 60391From EGPC 25282 25282 21637 21637From SCA 15098 15098 13573 13573From CBE 32 32 0 0From economic authorities 3047 3047 1245 1245
From companies 2648 2902 3894 4194Other ( from EGPC & TML ) 3108 3108 4355 4355Other 3240 9839 8691 15387
Sales of Goods and Services 12038 12044 16216 16216Financing Investment 5765 5765 7855 7855Other 12488 33060 33833 32877
Source: The Ministry of Finance .
2007/2008 2008/2009
- 177 -
(4/2) Consolidated Fiscal Operations of the General Government ( The Budget Sector, NIB and SIFs )
(Total Revenues)
( LE mn )
The Budget Sector
The Budget Sector, NIB
& SIFs
The Budget Sector
The Budget Sector, NIB
& SIFs
Total Revenues 268114 303361 259617 296341Tax Revenues 170494 170494 191626 191626
Taxes on Income, Profits 76618 76618 89642 89642From EGPC 32181 32181 34308 34308From SCA 9443 9443 10900 10900From CBE 0 0 0 0From other units 18591 18591 25351 25351Payable by individuals 16403 16403 19083 19083
Taxes on Property 8770 8770 9133 9133Taxes on Goods and Services 67095 67095 75892 75892Taxes on International Trade 14702 14702 13857 13857Other Taxes 3309 3309 3102 3102
Grants 4332 4332 1723 1723Current 2352 2352 240 240
Capital 1980 1980 1483 1483Other Revenues 93288 128535 66268 102992
Property Income 54570 61618 41803 49436From EGPC 25546 25546 21010 21010From SCA 12729 12729 15252 15252From CBE 205 205 498 498From economic authorities 1431 1431 1287 1287
From companies 3272 3272 3266 3266Other ( from EGPC & TML ) 4527 4527 -2912 -2912Other 6860 13908 3402 11035
Sales of Goods and Services 17212 17212 15160 15160Financing Investment 8873 8873 6755 6755Other 12633 40832 2550 31641
Source: The Ministry of Finance .
2009/2010 2010/2011
- 178 -
(4/2) Consolidated Fiscal Operations of the General Government (Contd.)( The Budget Sector, NIB and SIFs )
(Total Revenues)
( LE mn )
The Budget Sector
The Budget Sector, NIB
& SIFs
The Budget Sector
The Budget Sector, NIB
& SIFs
Total Revenues 221404 248835 282505 288545
Total Expenditures 282290 305795 351500 356944
Cash Deficit 60886 56960 68995 68399
Net Acquisition of Financial Assets 236 10603 2831 3980Overall Fiscal Balance 61122 67563 71826 72379
Financing Sources 61122 67563 71826 72379Domestic Financing 527 6604 83627 79664
Banking Financing -3187 -4701 98818 100140Central Bank -33394 -35306 -15285 -15285Other Banks 30207 30605 114103 115425
Non- Banking Financing 3714 11305 -15191 -20476NIB 2271 0 1449 0SIFs 119 0 5417 0Other 7545 7545 -19930 -19930NIB Borrowing 0 9981 0 1581Special Accounts for Economic Authorities -6221 -6221 -2127 -2127
Blocked Account Used in Amortizing Part of CBE Bonds 38970 38970 0 0Foreign Borrowing 11439 11439 23343 23343Arrears -56 -56 -4 -4Others, of which : 14791 15154 -601 3915
Special Accounts for Budget Entities 0 0 0 0
Financing Effects for Eliminations 0 1 0 0Exchange Rate Revaluation -4276 -4276 3366 3366Net Privatization Proceeds 673 673 183 183Difference between Treasury Bills Face Value & Present Value -1149 -1149 -10915 -10915Foreign Debt Reclassification Diff. and Related FX Diff. 0 0 -25155 -25155Discrepancy 203 203 -2018 -2018
Cash deficit (surplus) as a percentage of GDP 6.8% 6.4% 6.6% 6.6%
Overall fiscal balance as a percentage of GDP 6.8% 7.5% 6.9% 6.9% Revenues as a percentage of GDP 24.7% 27.8% 27.1% 27.7% Expenditures as a percentage of GDP 31.5% 34.1% 33.7% 34.2%Source: The Ministry of Finance .
2007/2008 2008/2009
- 179 -
(4/3) Summary of the Consolidated Fiscal Operations of the General Government ( The Budget Sector, NIB and SIFs )
( LE mn )
The Budget Sector
The Budget Sector, NIB
& SIFs
The Budget Sector
The Budget Sector, NIB
& SIFs
Total Revenues 268114 303361 259617 296341
Total Expenditures 365987 396768 392097 430641
Cash Deficit 97873 93407 132480 134300
Net Acquisition of Financial Assets 165 5479 -2120 -4262Overall Fiscal Balance 98038 98886 130360 130038
Financing Sources 98038 98886 130360 130038Domestic Financing 101492 102415 144149 135560
Banking Financing 40263 39380 99970 97625Central Bank 11561 11561 24540 24540Other Banks 28702 27819 75430 73085
Non- Banking Financing 61229 63035 44179 37935NIB 3687 0 1227 0SIFs 5176 0 11071 0Other 53014 53014 30954 30954NIB Borrowing 0 10669 0 6054Special Accounts for Economic Authorities -648 -648 927 927
Blocked Account Used in Amortizing Part of CBE Bonds 0 0 0 0Foreign Borrowing 2458 2458 5024 5024Arrears 0 0 0 0Others, of which : 347 273 -238 8030
Special Accounts for Budget Entities 0 0 0 0
Financing Effects for Eliminations 0 -1 0 -1Exchange Rate Revaluation 1328 1328 3945 3945Net Privatization Proceeds 425 425 22 22Difference between Treasury Bills Face Value & Present Value -227 -227 -7419 -7419Foreign Debt Reclassification Diff. and Related FX Diff. 0 0 0 0Discrepancy -7785 -7785 -15123 -15123
Cash deficit (surplus) as a percentage of GDP 8.1% 7.7% 9.6% 9.7%
Overall fiscal balance as a percentage of GDP 8.1% 8.2% 9.5% 9.4% Revenues as a percentage of GDP 22.2% 25.1% 18.8% 21.5% Expenditures as a percentage of GDP 30.3% 32.9% 28.5% 31.3%Source: The Ministry of Finance .
2009/2010 2010/2011
- 180 -
(4/3) Summary of the Consolidated Fiscal Operations of the General Government (Contd.)( The Budget Sector, NIB and SIFs )
(LE mn)
Gross Domestic Debt (1+2+3-4) 587405 630966 658307 755297 888661 1044914
1- Net Domestic Debt of Government (A+B+C+D+E) 387719 478173 478811 562327 663818 808113
A- Balances of Bonds & Bills 349957 562897 568960 681838 779232 916976 Treasury bonds with the CBE 164016 165980 122378 121708 121533 130596 Local currency bonds with public sector banks 4000 4000 4000 4000 4000 4000 Bonds offered abroad *: 0 0 0 0 0 0
US$ 5109 3868 3750 4036 6005 7583LE 0 0 112 3773 3808 3954
Egyptian treasury bonds 58000 57000 78500 92500 159767 206767 Government notes to compensate for the actuarial deficit in social insurance funds 2000 2000 2000 2000 2000 2000 Housing bonds 122 119 117 116 114 115 Foreign currency bonds with public sector commercial banks 12014 11886 11126 11677 11883 0 The equivalent of the retained 5% of corporate profits to purchase government bonds 1552 1588 1636 1700 1764 1830 Bonds of the Insurance Funds (against the transfer of NIB debt to the Treasury) 0 197799 198902 201248 202237 204028 Treasury Bills 103144 118657 146439 239080 266121 356103
B- Borrowing from other entities 0 0 0 0 0 2000
C- Credit Facilities from the Social Insurance Funds 0 4517 2343 2343 2343 2343
D- Net Government Balances with the Banking System -104860 -89241 -92492 -121854 -117757 -113206
E- Government Borrowing from NIB x 142622 0 0 0 0 0
2- Borrowing of Economic Authorities (Net) 47387 44557 50123 52255 67771 66290
Net Balances of Economic Authorities with the Banking System -2809 -7177 -1156 2193 16302 14149 Borrowing of Economic Authorities from NIB ** 50196 51734 51279 50062 51469 52141
3- NIB Debt (Net) 351205 166201 189180 200754 222205 238179NIB Debt 354962 169152 193071 205560 227715 240851
Deposits of the NIB with the banking system (-) 3757 2951 3891 4806 5510 2672
4- NIB Intradebt 198906 57965 59807 60039 65133 67668 Government debt to the NIB (investments in government securities) 6088 6231 8528 9977 13664 15527 Government borrowing from NIB 142622 0 0 0 0 0 Loans of economic authorities to NIB 50196 51734 51279 50062 51469 52141
Source: Central Bank of Egypt - Ministry of Finance - National Investment Bank. * ( Holdings of resident financial institutions in Egypt represented in the banking system and the insurance sector ). ** Apart from the interest payments due on the NIB. x As of 1/7/2006, the government debt to the NIB was cleared to zero, and the Bank's obligations to insurance and pension funds were transferred to become obligations on the government. Moreover, bonds were issued against the government debt to the Bank at an initial value of LE 197.7 billion.
(4/4) Gross Domestic Debt
End of 2006 2007 2008
- 181 -
2010 20112009
(LE mn)
End of June 2006 2007 2008 2009 2010 2011
Liabilities :of which 354962 169152 193071 205560 227715 240851
. Social Insurance Fund for Gov. Employees 135735 27428 29076 29638 31613 32982
. Social Insurance Fund for Pub. & Priv. Business Sectors Employees 105703 20574 22632 24895 27384 29663
. Proceeds from investment certificates 64038 68485 79232 81454 91134 94635
. Accumulated interest on investment certificates (Category A) 7028 7579 7509 8654 8648 8747
. Proceeds from US dollar development bonds 824 483 152 11 10 9
. Post office savings 39097 43518 49255 54487 64837 71978
. Others* 2537 1085 5215 6421 4089 2837
Assets :of which 354962 169152 193071 205560 227715 240851. Loans to government 142622 0 0 0 0 0
. Loans to economic authorities 50196 51734 51279 50062 51469 52141
. Investments in government securities (bills and bonds) 6088 6231 8528 9977 13664 15527
. Deposits of the NIB with the banking system 3757 2951 3891 4806 5510 2672
. Lending to holding companies and affiliate units, concessional loans, and others 152299 108236 129373 140715 157072 170511 (net NIB debt minus its intra debt)Source: Central Bank of Egypt - National Investment Bank.
* Including deposits of the private insurance funds, saving certificates, and loans & deposits of various entities.
(4/5) National Investment Bank ( Resources and Uses)
- 182 -
(US$mn)
Change
Value % Value % (-)
Balance of Current Account (4317.6) (2768.8) 1548.8
Balance of Current Account (Excluding Transfers) (14781.0) (15905.6) (1124.6)
Receipts 47436.0 100.0 48865.6 100.0 1429.6
Export proceeds** 23873.1 50.3 26992.5 55.2 3119.4
Transportation, of which 7216.5 15.2 8069.1 16.5 852.6
Suez Canal dues 4516.8 9.5 5052.9 10.3 536.1
Travel 11591.3 24.4 10588.7 21.7 (1002.6)
Investment income 829.0 1.8 418.8 0.9 (410.2)
Government receipts 217.9 0.5 117.7 0.2 (100.2)
Other receipts 3708.2 7.8 2678.8 5.5 (1029.4)
Payments 62217.0 100.0 64771.2 100.0 2554.2
Import payments** 48993.1 78.7 50776.5 78.4 1783.4
Transportation 1229.7 2.0 1385.3 2.1 155.6
Travel 2327.5 3.7 2112.6 3.3 (214.9)
Investment income, of which 5193.7 8.4 6466.5 10.0 1272.8
Interest paid 553.6 0.9 551.8 0.9 (1.8)
Government expenditures 1534.5 2.5 1106.1 1.7 (428.4)
Other payments 2938.5 4.7 2924.2 4.5 (14.3)
Transfers 10463.4 100.0 13136.8 100.0 2673.4
Private (net) 9509.4 90.9 12383.9 94.3 2874.5
Official (net) 954.0 9.1 752.9 5.7 (201.1)
*Preliminary figures.
**Including the exports & imports of free zones.
- 183 -
(5/1) Balance of Payments
2009/2010 * 2010/2011*
FY
(US$mn)
2009/2010 * 2010/2011*Value Value
Capital & Financial Account 8325.4 -4823.5
Capital Account -36.2 -32.3Financial Account 8361.6 -4791.2 Direct Investment Abroad -976.6 -958.0 Direct Investment in Egypt (Net) 6758.2 2188.6 Portfolio Investments Abroad (Net) -522.2 -117.7 Portfolio Investments in Egypt (Net), Of which : 7879.3 -2550.9 Bonds 1357.3 211.0
Other Investments (Net) -4777.1 -3353.2 Net Borrowing 2350.0 876.0
Medium -and Long -Term Loans -522.8 -1467.8
Drawings 1228.9 485.3
Repayments -1751.7 -1953.1
Medium -Term Suppliers' and Buyers' Credit -39.7 -48.9
Drawings 51.8 88.7
Repayments -91.5 -137.6
Short -Term Suppliers' and Buyers' Credit (Net) 2912.5 2392.7 Other Assets -9669.1 -3427.1 CBE -40.7 -64.3
Banks -2073.0 -1608.8
Other -7555.4 -1754.0
Other Liabilities 2542.0 -802.1
CBE 1187.1 -44.0
Banks 1354.9 -758.1
Net Errors & Omissions -652.1 -2161.6Overall Balance 3355.7 -9753.9Change in Reserve Assets, Increase (-) -3355.7 9753.9Source: CBE.
* Preliminary figures.
- 184 -
(5/1) Balance of Payments (Contd.)
FY
(US$ mn)
Value % Value % Total *** 23873.1 100.0 26992.5 100.0 3119.4Fuels , Mineral Oils & Products 10634.6 44.5 12605.1 46.7 1970.5
Crude oil 4475.0 18.7 5662.0 21.0 1187.0Petroleum products **** 5783.6 24.2 6473.7 24.0 690.1Coal & types thereof 75.7 0.3 63.9 0.2 (11.8)
Raw Materials 1272.6 5.3 1414.8 5.2 142.2Cotton 125.0 0.5 220.9 0.8 95.9Potatoes 45.9 0.2 42.7 0.2 (3.2)Edible fruits & nuts 159.1 0.7 171.3 0.6 12.2Oil seeds & oleaginous fruits, medicinal plants & plants for manufacturing 46.8 0.2 55.1 0.2 8.3
Spices&vanilla 7.1 0.0 6.4 0.0 (0.7)Medicinal plants 20.6 0.1 18.6 0.1 (2.0)Citrus fruits 18.4 0.1 30.7 0.1 12.3Raw hides & tanned leather 13.6 0.1 44.2 0.2 30.6Flax, raw 11.9 0.0 1.2 0.0 (10.7)Edible vegetables roots & tubers 126.1 0.5 233.9 0.9 107.8Dairy products,eggs & honey 119.8 0.5 151.8 0.6 32.0
Semi-finished Goods 1624.8 6.8 2081.9 7.7 457.1Carbon 82.1 0.3 113.6 0.4 31.5Essential oils & resins 16.3 0.1 40.1 0.1 23.8
- 185 -
Change(-)
(5/2) Exports by Degree of Processing *
Fiscal Year2009/2010 2010/2011**
(US$ mn)
Value % Value % Cotton yarn 127.0 0.5 212.3 0.8 85.3Aluminium, unalloyed 46.4 0.2 73.9 0.3 27.5Animal & vegetable fats, greases & oils & products 113.5 0.5 114.4 0.4 0.9Synthetic fibers 32.2 0.1 70.3 0.3 38.1Organic & inorganic chemicals 487.5 2.0 585.9 2.2 98.4Cast iron & semi-finished products & rolled iron 397.6 1.7 454.2 1.7 56.6Leather, tanned 25.9 0.1 52.1 0.2 26.2Tanning or dyeing extracts 66.5 0.3 101.7 0.4 35.2Plastic & articles thereof 212.0 0.9 229.8 0.9 17.8Finished Goods 10070.9 42.2 10850.2 40.2 779.3Milk & condensed cream 46.2 0.2 17.1 0.1 (29.1)Dried onion 5.7 0.0 14.0 0.1 8.3Rice 215.4 0.9 25.9 0.1 (189.5)Vegetable & fruit preparations 21.9 0.1 48.3 0.2 26.4Miscellaneous edible preparations 479.0 2.0 349.4 1.3 (129.6)Manufactured tobacco and tobacco substitutes 83.8 0.4 75.9 0.3 (7.9)Sugar and its products 81.4 0.3 137.1 0.5 55.7Pharmaceuticals 393.5 1.6 458.1 1.7 64.6Fertilizers 725.0 3.0 1135.7 4.2 410.7Cement***** 214.2 0.9 152.0 0.6 (62.2)
- 186 -(5/2) Exports by Degree of Processing * (Contd.)
Fiscal YearChange(-) 2009/2010 2010/2011**
(US$ mn)
Value % Value % Extracts of essential oils & resins 101.6 0.4 82.6 0.3 (19.0)Leather products 35.8 0.1 32.2 0.1 (3.6)Rubber & articles 41.7 0.2 47.2 0.2 5.5Paper, cardboard paper & articles thereof 234.5 1.0 302.1 1.1 67.6Ceramic products 179.4 0.8 240.5 0.9 61.1Cars, bicycles & tractors 262.1 1.1 203.3 0.8 (58.8)Cotton textiles 484.1 2.0 628.0 2.3 143.9Carpets & other floor coverings 169.6 0.7 198.4 0.7 28.8Shoes & accessories 1.7 0.0 3.8 0.0 2.1Ready-made clothes 665.8 2.8 771.2 2.9 105.4Glass & glassware 238.2 1.0 270.8 1.0 32.6Copper & articles 82.5 0.3 214.6 0.8 132.1Aluminium articles 358.2 1.5 328.0 1.2 (30.2)Articles of iron and steel 577.0 2.4 526.7 2.0 (50.3)Wood & articles thereof and charcoal 15.5 0.1 24.7 0.1 9.2Marble & granite 70.3 0.3 103.0 0.4 32.7Articles of base metals 251.6 1.1 277.4 1.0 25.8Optical appliances 60.1 0.3 88.8 0.3 28.7Soap & Detergents, fabricated candles 232.9 1.0 329.4 1.2 96.5
Miscellaneous Goods (Undistributed) 270.2 1.1 40.5 0.2 (229.7)Source: Central Bank of Egypt.* Commodities are classified according to the Harmonized System.** Provisional.*** Include exports of free zones. **** Include natural gas, and bunker & jet fuel.***** Taking into consideration the Ministerial Decree No. 340 for 2009 banning cement export from April,13,to Sept. ,1 , 2009; and Decree No. 604 for 2009 regarding the continual ban of cenmet export till Oct. , 1 , 2010.
(5/2) Exports by Degree of Processing * (Contd.)
Fiscal YearChange(-) 2009/2010 2010/2011**
- 187 -
(US$ mn)
Value % Value % Total *** 48993.1 100.0 50776.5 100.0 1783.4Fuels, Mineral Oils & Products 3819.8 7.8 4657.6 9.3 837.8
Petroleum products **** 3284.3 6.7 4032.3 7.9 748.0Coal & types thereof 121.4 0.2 185.7 0.4 64.3
Raw Materials 5545.2 11.3 7355.6 14.5 1810.4Crude oil 1876.7 3.8 1910.7 41.0 34.0Wheat 1402.2 2.9 2460.7 4.8 1058.5Maize 506.6 1.0 821.8 1.6 315.2Tobacco 509.6 1.0 579.9 1.1 70.3Metal ores 143.3 0.3 135.2 0.3 (8.1)Iron, ore 254.4 0.5 480.7 0.9 226.3Seeds & oleaginous seeds 409.3 0.8 436.8 0.9 27.5Cotton 107.0 0.2 108.4 0.2 1.4
Intermediate Goods 16264.1 33.2 15804.9 31.1 (459.2)Sugar, raw 253.8 0.5 291.3 0.6 37.5Animal and vegetable fats, greases & oils and products 1247.9 2.5 1497.0 2.9 249.1Cement 638.5 1.3 422.2 0.8 (216.3)Organic & inorganic chemicals 1730.2 3.5 1691.4 3.3 (38.8)Fertilizers 256.8 0.5 285.0 0.6 28.2Tanning & dyeing extracts 307.9 0.6 290.2 0.6 (17.7)Essential oils & resinoids 81.1 0.2 96.0 0.2 14.9Plastic & articles thereof 1454.7 3.0 1252.4 2.5 (202.3)
(5/3) Imports by Degree of Use *
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Fiscal YearChange(-) 2009/2010 2010/2011**
(US$ mn)
Value % Value % Wood & articles thereof 899.4 1.8 949.0 1.9 49.6Paper, cardboard paper & articles thereof 1127.0 2.3 1029.7 2.0 (97.3)Cotton textiles 226.3 0.5 177.5 0.3 (48.8)Synthetic fibers 468.9 1.0 604.2 1.2 135.3Ceramic products 323.0 0.7 302.3 0.6 (20.7)Glass & articles 234.3 0.5 115.6 0.2 (118.7)Iron & steel products 3260.2 6.7 2857.5 5.6 (402.7)Copper & articles 313.2 0.6 432.9 0.9 119.7Rubber & articles 450.1 0.9 421.0 0.8 (29.1)Aluminium & articles 346.5 0.7 324.0 0.6 (22.5)Articles of base metals 508.0 1.0 533.3 1.1 25.3Parts & accessories of motor vehicles 1872.1 3.8 1961.8 3.9 89.7
Investment Goods 10022.3 20.5 10419.8 20.5 397.5Pumps, fans & parts thereof 797.9 1.6 605.4 1.2 (192.5)Machines and apparatus for ginning and spinning & parts thereof 132.1 0.3 110.9 0.2 (21.2)
Computers 1010.8 2.1 807.4 1.6 (203.4)Motors, generators, transformers & parts thereof 676.6 1.4 964.6 1.9 288.0Parts of railway and tramway locomotives or rolling stock equipment 95.7 0.2 251.5 0.5 155.8
Tractors 36.7 0.1 26.1 0.1 (10.6)Vehicles for transport of passengers 36.5 0.1 40.0 0.1 3.5Vehicles for transport of goods 82.4 0.2 40.4 0.1 (42.0)
(5/3) Imports by Degree of Use* (Contd.)
- 189 -
Fiscal YearChange(-) 2009/2010 2010/2011**
(US$ mn)
Value % Value % Tools, implements, cuttery & spoons 305.9 0.6 292.4 0.6 (13.5)Air conditioners 203.7 0.4 286.2 0.6 82.5Cranes and bulldozers & parts thereof 1096.4 2.2 1677.8 3.3 581.4Agricultural machinery 115.9 0.2 155.5 0.3 39.6Printing machinery & parts 80.3 0.2 72.8 0.1 (7.5)Electric appliances for telephones & telegraph 777.0 1.6 743.4 1.5 (33.6)Optical appliances 648.2 1.3 490.8 1.0 (157.4)
Consumer Goods 12250.4 25.0 12273.8 24.1 23.4A - Durable Goods 3337.2 6.8 2865.1 5.6 (472.1)
Household refrigerators & electric freezers 217.5 0.4 192.5 0.4 (25.0)Televisions & parts thereof 108.0 0.2 112.0 0.2 4.0Vehicles for transport of persons 1280.8 2.6 886.7 1.7 (394.1)Household electric-motor appliances 631.7 1.3 622.6 1.2 (9.1)
B - Non-durable Goods 8913.2 18.2 9408.7 18.5 495.5Meat and edible offals 625.9 1.3 999.1 2.0 373.2Fish, crustaceans, molluscs and others 308.3 0.6 302.1 0.6 (6.2)Dairy products, eggs, poultry and honey 401.5 0.8 473.2 0.9 71.7Edible vegetables roots & tubers 377.5 0.8 628.3 1.2 250.8Tea 194.5 0.4 152.7 0.3 (41.8)
(5/3) Imports by Degree of Use* (Contd.)
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Fiscal YearChange(-) 2009/2010 2010/2011**
(US$ mn)
Value % Value %Miscellaneous edible preparations 834.1 1.7 833.1 1.6 (1.0)Pharmaceuticals 2032.0 4.1 1889.2 3.7 (142.8)Insecticides 31.7 0.1 31.3 0.1 (0.4)Residues of foodstuff industries & animal fodder 165.9 0.3 389.5 0.8 223.6Live animals 58.3 0.1 103.7 0.2 45.4Ready-made clothes 825.6 1.7 789.3 1.6 (36.3)Cotton textiles 479.3 1.0 543.8 1.1 64.5Sugar, refined and products 40.0 0.1 55.3 0.1 15.3Lentils 48.7 0.1 65.8 0.1 17.1Soap, detergents & artificial wax 130.7 0.3 193.2 0.4 62.5
Miscellaneous Goods (Undistributed) 1091.3 2.2 264.8 0.5 (826.5)Source: Central Bank of Egypt.* Commodities are classified according to the Harmonized System.** Provisional.*** Including imports of free zones, and commodity grants & loans.**** Including gas, and bunker & jet fuel.
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(5/3) Imports by Degree of Use* (Contd.)
Fiscal YearChange(-) 2009/2010 2010/2011**
(US$ mn)
2009/2010 2010/2011** 2009/2010 2010/2011** 2009/2010 2010/2011**Total *** 23873.1 26992.5 48993.1 50776.5 (25120.0) (23784.0)
European Union 8479.8 11437.0 17890.5 18097.7 (9410.7) (6660.7)Other European countries 1072.9 1704.8 6014.3 5416.8 (4941.4) (3712.0)Russian Federation & C.I.S 119.9 191.6 1360.0 849.7 (1240.1) (658.1)United States of America 4408.7 3600.3 5299.8 5974.0 (891.1) (2373.7)Arab countries 4761.3 4864.7 5404.8 6644.4 (643.5) (1779.7)Asian countries (Non Arab) 3400.0 4026.1 10517.1 10848.9 (7117.1) (6822.8)African countries (Non Arab) 380.9 542.9 560.0 625.3 (179.1) (82.4)Australia 18.3 14.9 245.9 352.6 (227.6) (337.7)Other countries & regions 1231.3 610.2 1700.7 1967.1 (469.4) (1356.9)
Source: Central Bank of Egypt* Including commodity grants and loans.** Provisional.*** Including exports & imports of free zones.
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(5/4) Regional Distribution of Exports and Imports
Fiscal YearProceeds of Exports Payments for Imports* Trade Balance
End of
Minimum
Maximum
Weighted average
Second: Market Rates Buy Sell Buy Sell
US Dollar 568.07 570.96 595.58 598.49
Euro 697.53 701.48 861.15 865.41
Pound Sterling 853.02 857.64 953.70 958.54
Swiss Franc 525.31 528.28 713.18 716.84
100 Japanese Yen 640.44 643.77 740.58 744.57
Saudi Riyal 151.46 152.24 158.81 159.60
Kuwaiti Dinar 1948.12 1966.12 2161.81 2176.32
UAE Dirham 154.63 155.48 162.12 162.96
Chinese Yuan 83.76 84.19 92.14 92.59
Source : CBE
The interbank Rates started at 23/12/2004
- 193 -
(5/5) Average LE Exchange Rates
(In piasters per foreign currency unit)
569.70
569.52
June 2010 June 2011
569.40 596.70
597.10
596.90
First: Interbank US$ Rates
(US$ mn)
Total External Debt* 29396.2 29871.8 28948.8 29592.6 29898.0 33892.8 31531.1 33694.2 34905.7
1- Medium & Long term debt : 27531.7 27904.3 27094.0 27959.6 28448.5 31373.5 29407.1 30739.4 32148.2
Rescheduled bilateral debt ** 16192.0 16384.8 15734.1 15229.0 14846.5 15606.4 14081.4 12599.3 12860.6
ODA 7900.0 8052.6 7836.4 7610.6 7396.5 7787.8 7448.0 7054.6 7271.6
Non-ODA 8292.0 8332.2 7897.7 7618.4 7450.0 7818.6 6633.4 5544.7 5589.0
Other bilateral debt 4350.0 4432.8 4291.3 4295.5 4346.0 4972.1 4824.2 4692.4 5214.5
Paris Club countries 3320.0 3263.4 3529.9 3590.4 3630.1 4130.4 3978.3 3774.7 4211.3
Other countries 1030.0 1169.4 761.4 705.1 715.9 841.7 845.9 917.7 1003.2
International & regional Organizations 4904.0 5080.8 5058.2 5205.0 6815.2 7361.5 8168.8 9977.5 10808.6
Suppliers' & buyers' credits 1133.1 1333.0 781.6 979.5 791.6 763.5 323.6 313.5 426.0
Egyptian bonds and notes 735.4 587.7 613.6 1861.9 1570.3 2651.8 1926.1 3079.5 2821.0
Long- term deposits *** 0.0 0.0 500.0 300.0 0.0 0.0 0.0 0.0 0.0
Private sector debt (non-guaranteed) 217.2 85.2 115.2 88.7 78.9 18.2 83.0 77.2 17.5
2- Short-term debt 1864.5 1967.5 1854.8 1633.0 1449.5 2519.3 2124.0 2954.8 2757.5
Deposits 1305.1 1267.5 819.3 633.1 536.0 1048.3 1156.1 1359.5 972.7
Other facilities 559.4 700.0 1035.5 999.9 913.5 1471.0 967.9 1595.3 1784.8
Source: Central Bank of Egypt - Loans & External Debt Department.
+ Provisional* The difference from World Bank data is in short-term debt .
** According to the agreement signed with Paris Club countries on May 25, 1991.
*** The deposit of the Arab International Bank has been converted from a short - term debt to a long - term deposit starting Dec. 2004.
2011+2007 2008 2009 2010
(5/6) External Debt Structure
- 194 -
End of June 2003 2004 2005 2006
(%)
FY 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 +
External Debt / Exports (G & S) 157.6 127.5 100.3 82.4 70.4 59.9 64.4 71.0 71.4
Debt Service (Principal & Interest) (US$ mn.) 2257.8 2525.5 2701.8 3040.7 2936.4 2595.9 3119.8 2617.5 2775.9
Debt Service / Exports (G & S) 12.1 10.8 9.4 8.5 6.9 4.6 6.4 5.5 5.7
Debt Service / Current Receipts (including Transfers) 10.1 9.2 7.9 7.3 5.9 3.9 5.4 4.5 4.5
Interest / Exports (G & S) 3.5 2.6 2.0 1.6 1.5 1.4 1.5 1.4 1.3
External Debt / GDP 42.5 38.1 31.1 27.6 22.8 20.1 16.9 15.9 15.2
Short-term Debt / Total External Debt 6.3 6.6 6.4 5.5 4.8 7.4 6.8 8.8 7.9
Short-term Debt / Net International Reserves 12.6 13.3 9.6 7.1 5.1 7.3 6.8 8.4 10.4
External Debt per capita (US$) 424.7 423.4 402.6 401.7 398.5 450.0 418.6 399.2 413.6
+ Prilimanary Figures.
- 195 -
(5/7) Main External Debt Indicators
(US$ mn)
ChangeEnd of June(-)%Value%Value
1211.7100.034905.9100.033694.2Total(761.3)39.413731.943.014493.2US dollar **
1.10.4145.10.4144.0Canadian dollar10.50.3117.50.3107.0Australian dollar
109.71.8618.71.5509.0Swiss franc(11.6)0.6203.40.6215.0Sterling pound268.412.84480.412.54212.0Japanese yen
9.70.3121.70.3112.0Danish krone1.10.05.10.04.0Norwegian krone2.10.128.10.126.0Swedish krona
138.66.12111.65.91973.0Kuwaiti dinar10.60.143.60.133.0Saudi riyal0.40.130.40.130.0UAE dirham
1229.028.810064.026.28835.0Euro(116.3)1.7605.72.2722.0Egyptain Pound319.77.52598.76.82279.0SDRs
Source: Loans & External Debt Department- CBE* Provisional.** Including liabilities due in US Dollar for other institutions and countries.
- 196 -
2011 *2010
(5/8) Distribution of External Debt by Main Currencies