Steve Chiotakis: With all the debt ceiling drama going on in the U.S. we figured we’d take you somewhere else for a moment. Not Greece, or Portugal, or Ireland, but Egypt. Six months after a popular revolution overthrew its dictator, the country has been selling its debt as a way to avert a crisis there.
Reporter Julia Simon’s on the line from Cairo with the latest on that. Hi, Julia.
Julia Simon: Good morning.
Chiotakis: So what’s the current Egyptian government doing to deal with its debt?
Simon: Well this whole week the National Bank of Egypt’s selling domestic treasury bills and bonds: so far a billion dollars worth of t-bills and half a billion dollars worth of t-bonds. This is the first time since the revolution that the government’s been selling bonds. With all the uncertainties in this transition the current government just needs to figure out how to get through the fiscal year.
Chiotakis: How bad is the Egyptian debt situation, Julia?
Simon: Foreign and domestic debt in Egypt is certainly a growing problem, but the primary concern’s the significant budget deficit. Interesting thing though is, last month they actually turned down a $3 billion loan from the IMF. And yet they have recently accepted some support from Gulf countries and debt forgiveness from the U.S.
Chiotakis: We’re hearing of big protests again in Tahrir Square today. How’s the political situation affecting the Egyptian economy?
Simon: This week the finance minister announced that foreign direct investment fell about 75 percent in the first quarter as compared to last year. Everything’s still very unpredictable here.
Chiotakis: Reporter Julia Simon in Cairo. Julia, thank you.
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