Central Bank raises interest rate to 10.5 pct
The Central Bank of Egypt increased its overnight deposit rate by half a percentage point to 10.5 percent after inflation accelerated to its fastest pace in a decade.
The overnight lending rate was raised by the same amount and is now 12.5 percent, the central bank said in a statement on its website today. The Cairo-based bank has increased rates four times this year by a total of two points.
“Despite the recent slight moderation in international food inflation, there are concerns relating to grain crops in light of adverse weather conditions which might prolong the international food price shock, Rania Al-Mashat, division chief of the monetary policy unit, said in the statement.
Emerging markets, including Turkey, Brazil, South Africa and India, have increased interest rates this month to fight inflation fueled by rising global oil and food costs. Egypt s inflation rate rose to 19.7 percent in May, the highest since the government began regularly releasing records to the public in 1998.
“You have the impact of high growth, and an increase in energy prices, said Reham El-Dessouki, an economist at Beltone Financial, a Cairo-based investment bank. “All these factors mean that inflation will probably increase.
The government approved a 30 percent pay increase for state workers in May to help soften the impact of inflation and raised fuel and cigarette prices to pay for the increase.
The economy in Egypt, the Arab world s most populous nation, will probably expand 7.1 percent in 2009 compared with 7 percent in 2008, the International Monetary Fund said in its latest report on its Web site. -Bloomberg
National Bank of Greece to expand in Egypt after failed bid
National Bank of Greece SA, the country s biggest bank, said it will expand on its own in Egypt after its bid to buy Banque du Caire SAE failed.
National, which confirmed that it made an offer for the Egyptian bank this week, continues to be interested in its development in Egypt and will proceed with the organic growth of its network, the Athens-based lender said in a bourse filing.
Egypt canceled the sale of Banque du Caire on June 25 because the bids were too low. National, which didn t say today how much it offered for the bank, has sought to acquire lenders in markets like Turkey and Serbia to tap growing demand for loans. -Bloomberg
Uganda, Egypt agree on trade, agriculture
Uganda and Egypt have agreed to form a joint business venture in agriculture, tourism and industry, according to press reports.
At a meeting at State House, Entebbe on Tuesday, President Yoweri Museveni and Egyptian Minister of International Cooperation Fayza Aboul Naga and Minster of Agriculture Amin Abaza agreed to partner in wheat growing, building an abattoir and establishing an animal feed plant.
State House reported that Aboul Naga also expressed interest in building a resort hotel on one of the beautiful beaches on Lake Victoria.
“President Museveni welcomed the idea and encouraged the minister to also consider investing in fruit processing.
Abaza on the other hand promised to notify Egyptian business people about the investment opportunities in Uganda. He said some Egyptian companies would be interested in importing powder milk from Uganda.
Museveni recently flagged off the first consignment of powder milk exports from Uganda processed by Sameer Livestock and Agriculture Company in Kampala.
State House also announced that the two parties would sponsor Ugandan students to study water engineering and irrigation.
Groundstar Resources assess Kom Ombo oil block
Groundstar Resources Limited announced that an independent resource assessment focused on oil has been completed by Gustavson Associates for five oil prospects on the Company s West Kom Ombo Block located in Upper Egypt, reported Marketwire.
Gustavson s resource estimate of the five prospects yielded a best estimate (P50) prospective recoverable oil resource of 569 million barrels of oil (341 million net to Groundstar). Groundstar is the operator of the block with a 60 percent working interest.
Gustavson was retained by Groundstar to prepare the report to estimate the potential undiscovered recoverable oil resources within the Lower Cretaceous-Abu Ballas reservoir that was proven to be oil bearing at the Al Baraka discovery announced by Centurion/Dana Gas in 2007.
The Al Baraka discovery is located 75 km to the east of the West Kom Ombo block; currently, Centurion is drilling an appraisal well (Kom Ombo #5) on the Al Baraka structure.
Gustavson conducted a re-evaluation of the subsurface data provided by Groundstar including re-interpretation of the 2D seismic coverage and petrophysical analysis of well logs from the Kom Ombo area.
Kam Fard, CEO and president of Groundstar, said, The exploration potential of the west Kom Ombo Block shown by the independent evaluation report submitted by Gustavson is extremely supportive of Groundstar s work to date. We look forward to continuing our aggressive work program on the block.
