Central Bank governor: Foreign reserves recession could abate by March

The foreign cash reserve recession rate may decline by March, Central Bank of Egypt Governor Hesham Ramez said.

The Central Bank had announced in early February that the reserves had reached US$13.6 billion, which would amount to a 16-year low, according to financial news agency Bloomberg.

Ramez told the privately owned paper Al-Shorouk that he seeks to preserve a certain amount of cash reserves — not for conditions related to the International Monetary Fund’s negotiations with Egypt over a $4.8 billion loan, but because it is a national target of central banks.

He said the reserves lost more than $22 billion to pay for several commitments, saying it was better to rationalize those sums a year ago.

The Central Bank governor added that the cash reserve is among the bank’s current priorities, especially because the reserves are in critical condition because of changes the country has experienced over the past two years.

“The government concluded the economic reform plan, which would be submitted to the IMF to activate the preliminary contract to get the loan signed in November,” said Ramez. “The plan didn’t include financial policy issues, which we don’t accept intervention within.”

He said the plan mainly depends on rationalizing subsidies, adding that, for instance, yachts and embassy vehicles should not be subsidized at times of major crises.

Ramez expected the Cabinet to submit its plan to the IMF this week following a social dialogue, particularly with parties.

He added that President Mohamed Morsy stressed during his meeting with the fund last week the necessity of considering the social dimension to the Cabinet plan.

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