Pound devaluation won't impact budget deficit - minister

Tuesday 15-03-2016 02:49 PM

Hani Qadri - Photo from the Ministry of Finance

CAIRO, Mar 15 (Aswat Masriya) - Egypt’s Minister of Finance Hani Qadri said on Monday that the devaluation of the Egyptian pound to 8.85 per dollar, down from EGP 7.73, will not have a major impact on Egypt's budget deficit.

"The devaluation of the pound cost the state $10 billion pounds," Qadri said in a phone interview with the private television channel CBC, adding "but it will also have a positive effect on revenue."

The impact of the devaluation on the budget deficit will not be large, he also said.

The Central Bank of Egypt (CBE) devalued the Egyptian pound by 14.5 per cent (EGP 1.12), the first time for it to depreciate the pound since Governor Tarek Amer took office last November.

The dollar's exchange rate in Egyptian banks accordingly hiked to EGP 8.95 per dollar, as the CBE allows banks to sell dollars at 10 piastres below or above the original value.

Qadri said that the government forecasts the budget deficit for the next fiscal year of 2016/2017 at 9.9 per cent of total GDP.

Qadri also stated in the phone interview that he expects Egypt to sustain a four per cent growth rate next year, instead of the five to 5.5 per cent that the government had initially expected at the beginning of the year. 

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