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Egypt increases size of planned stimulus package to $4.36 billion
File - An employee counts money in a bank in Cairo in this August 27, 2012. (REUTERS/Asmaa Waguih)
File - An employee counts money in a bank in Cairo in this August 27, 2012. (REUTERS/Asmaa Waguih)
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CAIRO: The Egyptian government is planning to spend around 30 billion Egyptian pounds ($4.36 billion) in a second stimulus package, Finance Minister Ahmad Galal said Monday, more than a previously slated 24 billion pounds.

The first stimulus package unveiled by the army-installed interim government was 29.6 billion pounds. The spending is designed to stimulate an economy hit by nearly three years of political turmoil.

Supported by $12 billion in aid from Gulf states, the government which took office in July has said the second stimulus package would be launched in January. The government came to power after the army ousted President Mohammad Morsi following mass protests against his rule

Egypt’s dollar-denominated T-bills paid the lowest yield on record at an auction Monday on prospects of increased political stability in North Africa’s largest economy.

The nation sold $1.19 billion of one-year notes at an average yield of 2.642 percent, according to an emailed statement from the central bank. That’s 10 basis points, or 0.1 percentage point, lower than the last similar sale in November. Bids for the securities were 1.3 times the $1.2 billion offered, the data show.

The country started selling foreign-currency debt locally in 2011 to curb the decline of reserves.

The central bank cut benchmark interest rates this month for the third time since August to boost economic growth. That has also helped push local borrowing costs to the lowest levels since January 2011.

“Any perceived improvement in the political or economic picture will reflect more on the dollar and euro T-bills than the pound ones,” Nour Mohieddine, assistant general manager for treasury at BNP Paribas Egypt SAE, said by phone. “Dollar T-bills still offer attractive yields, especially with rates coming down on the pound.”

A version of this article appeared in the print edition of The Daily Star on December 17, 2013, on page 5.
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