Egypt’s Military Lends Central Bank $1Bn
The Egyptian military has lent the Central Bank of Egypt (CBE) $1bn, an aide to Field Marshall Husain Tantawi said on 2 December. The loan, which comes from income generated by projects operated by the armed forces, will be used to offset the slide in the country’s foreign exchange reserves, which according to the aide could fall from the current levels to $15bn by the end of next January. According to the CBE reserves fell to $20.1bn at the end of November from $36bn at the end December 2010. The reduction in the reserves has been attributed to the outflow of capital since February 2011 and the liquidation of portfolio positions on the stock exchange by foreign investors, economic experts maintain. Meanwhile, Egypt is still uncertain about the need to borrow $3.2bn from the IMF to finance its budget deficit and the matter has to be decided by the new Minister of Finance Mumtaz al-Sa'id, who was appointed in the cabinet reshuffle which took place on 7 December. Lending by the armed forces suggested they have accumulated sizeable reserves under the Mubarak era.
Copyright MEES 2011.
