Egypt central bank raises rates, cites food prices
Reuters reported that Egypt s central bank raised its key overnight interest rates by 25 basis points on Friday, citing higher food prices and pressure from rising economic growth.
This is the first change in more than a year. The bank said it raised its overnight deposit rate to 9 percent and the lending rate to 11 percent.
This decision has been induced by the persistent increase in food inflation and expected upward pressure over the coming period, Reuters quoted the bank as saying.
Domestic food prices were affected by the increase in international food prices, which eventually led to the increase of the prices of non-food commodities, the bank said in a statement.
The bank also said faster economic growth had spread beyond the manufacturing and construction sectors and could put further upward pressure on prices. Other sectors have started to record higher growth rates that may precipitate more inflationary pressures, the bank said.
According to Reuters, consumer prices in urban areas rose 6.9 percent in the year to December, unchanged from the year to November, the government said in January.
On the stock exchange
Nile Cotton Ginning issued a statement concerning what was published in a local daily newspaper on Feb. 7 about reaching a settlement with Misr Bank. In its statement, which was sent to the Case, the company denied what was published on a daily newspaper about the financial statements that will show LE 205 million rise in profit.
El Swedy Cables announced the construction of a new factory in Algeria.
The company would own 100 percent of the establishment which will produce power cables, overhead conductors and control cables. – Case
Bahrain decides BD 100 is minimum wage
Gulf News reported that all Indian unskilled workers, including those in the construction sector, will be paid a minimum wage of 100 Bahraini Dinar (BD) starting from March, said Indian Ambassador Balkrishna Shetty on Thursday.
The new wage structure will apply to all Indians leaving their homeland to work in Bahrain and to the workers who are already in Bahrain when they renew their contracts, the ambassador said in a statement.
Our recommendation to fix a minimum wage of BD100 for all unskilled workers has been accepted by the Overseas Indian Affairs Ministry.
Starting March 1, India will stop workers from leaving India for Bahrain unless they have contracts attested by the Indian embassy, the ambassador said. If the employers fail to pay the minimum wage set by the government, we shall hold the recruiting agent responsible.
Paced by UAE, GCC sukuk market surges
Paced by a remarkable vibrancy in UAE s Islamic finance sector, the volume of sukuk issuances in the Middle East, particularly the GCC states, rose substantially to 53 from 38 last year, Khaleej Times reported.
The total number of sukuk issued worldwide in 2007 was 207, compared with 199 in 2006 and 89 in 2005. In terms of value, the number of sukuk issued in 2007 added up to $47.099 billion, up 73 percent from the total in 2006. In 2005 the number was a mere $10 billion, according to Islamic Finance Information Service (IFIS).
Listed sukuk on the Dubai International Financial Exchange alone amounted to about $16.1 billion at year-end 2007, up from $7.6 billion in 2006, recording more than 100 percent growth, according to S&P. In a recent report, it said the surge in sukuk issuance highlighted both issuers and investors growing interest in Islamic finance. Demand is likely to be met in the GCC, where there are signs that issuers are increasingly turning to sukuk to raise funds in a context of rapid economic growth.
However, the newspaper said that Islamic finance experts pointed out that as home to most of the $24 billion worth of sukuks launched worldwide during the past five years, Dubai needs to have more market-makers to create a vibrant secondary market to sustain its leadership in Islamic finance. Faced with increased competition from Bahrain, Riyadh, Singapore, Kuala Lumpur and even London as a centre of Islamic finance, Dubai should encourage institutional investors who own a large chunk of the sukuks to come to the secondary market to make it active.
The number of corporate sukuk in the GCC grew to 21 in 2007 from 13 in 2006 and 10. The value of these sukuk rose too, rising to $13.5 billion in 2007 from $6.8 billion in 2006 and $2 billion in 2005.
Dollar moves narrowly ahead of G7
The dollar moved narrowly against other major currencies in Asia on Friday as currency players said they were waiting to see this weekend s meeting of the Group of Seven richest nations.
The dollar was quoted at 107.40 yen in Tokyo late morning, compared with 107.48 yen in New York late Thursday.
The euro was changing hands at $1.4489, slightly up from $1.4479 in New York late Thursday. It edged down to 155.59 yen from 155.70 yen.
Although markets are not expecting decisive action, all eyes are focused on the meeting since it is an important event, said Masaki Fukui, senior market economist at the forex division of Mizuho Corporate Bank. – AFP
