Praises flotation, value-added

Chairman of the Egyptian Businessmen Association Ali Eissa praised the flotation of the pound and the VAT law as well as the increase in fuel prices, considering these decisions as the first economic reform steps. He added that the government should provide social guarantees for low income people and apply effective banking measures to tackle the inflation.

Eissa added that the flotation affected some companies in the Egyptian market, especially those which have opened letters of credit or borrowed in foreign currency before the decision. He continued that a large number of companies have huge debts in dollar for banks and some of them closed or announced bankruptcy.

Eissa said that the last period has witnessed extensive discussions between investors' associations and the Cabinet and the Central Bank of Egypt to solve the currency difference crisis. After the meetings, the banks agreed to schedule the debts of companies over three years and abolish any legal action against the companies.

Eissa pointed out that the solution of the current economic crisis requires that the government exerts more efforts to increase the dollar resources, speed the issuance of the new investment law and encourage Egyptian companies to increase domestic production and reduce imports.

Eissa expected that the dollar exchange rate will be stable in the coming period, especially after Egypt has received the first installment of the IMF loan.