Oct 11 2012
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Egypt May Sell $1 Bln Sukuk to Plug Budget Deficit -Official
Thursday, Oct 11, 2012
(This article was first published Wednesday.)
CAIRO (Zawya Dow Jones)--Egypt, which is struggling to boost its floundering economy, may tap the Islamic debt market for the first time ever this year to help finance its spending plans, according to an adviser to the country's minister of finance.
"We are ready to launch a sukuk to fill the budget gap deficit as well as financing infrastructure projects," Sami Khallaf said at a conference in Cairo. "We have already submitted a project of sovereign sukuks."
Egypt's finance minister last month predicted a significant budget shortfall during the 2012/13 fiscal year, after saying its budget deficit for the last fiscal year reached 11% of the country's gross domestic product versus an earlier projection of 8.6%.
"The law is already in its final stage," Mr. Khallaf said. "We agreed we wouldn't stop until we get it to the president or until the parliament reconvenes."
Egypt's economy was devastated by a revolution that ended last February, and the country's new government has been on a global charm offensive to attract new investment and aid loan packages from foreign countries and international financial institutions. The country's prime minister this week said the government aims to achieve economic growth of 7.5% within the next five years by attracting new foreign investment.
The country is also in the midst of negotiations for a $4.8 billion loan from the International Monetary Fund that would help mend its gaping budget deficit, shore up its withering foreign currency reserves and, most importantly, help resurrect investor confidence.
"Nobody will buy this [bond] until the IMF deal is signed and paid,"
Mr. Khallaf said.
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