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Exchange rate expectation likely EGP 16 to USD for FY 2017/2018 budget - Daily News Egypt

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Exchange rate expectation likely EGP 16 to USD for FY 2017/2018 budget

Oil price expectation for budget to be between $55 and $75 per barrel

Amr El-Garhy, the Minister of Finance, said on Sunday that the dollar price will likely be EGP 16 in the budget for fiscal year (FY) 2017/2018, which will start in July. The budget will be presented to the parliament before 31 March.

El-Garhy told Daily News Egypt that the dollar exchange rate against the pound in the budget is still under discussion; however, it is expected to be EGP 16.

“Foreign investments in government treasury bills have reached $3.5bn since flotation until now. We seek to make them reach EGP 10bn by the end of 2017, marking a return to their levels before 25 January 2011,” El-Garhy added.

He expected electricity and petroleum subsidies to reach EGP 200bn, compared to EGP 135bn this year after the pound’s flotation.

“It is expected that the gross domestic product (GDP) will grow by 3.8-4% by the end of this fiscal year, while it will jump to 4.8% in the next fiscal year,” El-Garhy said, noting that the deficit in the new budget will range between 9.25-9.5% of the total GDP.

El-Garhy said that the mission of the International Monetary Fund (IMF) will visit Egypt after 25 April, adding that the second tranche of the loan, estimated at $1.2bn, will be provided in May or June after the spring meetings of the IMF and the World Bank.

El-Garhy revealed the ministry’s estimation of the oil barrel price ranges between $55 and $75 per barrel in the budget of FY 2017/2018.

The price of the oil barrel in the current budget is set at $40.

Egypt increased the prices of petroleum products in November 2016 as part of its plan to be free from subsidies by the year 2019 or 2020, according to its economic reform programme conduced in cooperation with the IMF.

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