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Etudes par pays volume 2, PDF, 346 p., 1,4 Mo - Femise

Etudes par pays volume 2, PDF, 346 p., 1,4 Mo - Femise

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11873_02 Study D2: Poverty, Informal Sector, Health and Labour<br />

multilateral). Aid from The Gulf States flowed in for the first time since<br />

1979 combined with writing off long-term debt to Gulf States (US $ 7<br />

billion).<br />

In the same time, the United States wrote off a substantial amount of its<br />

military debt (US$ 6.7 billion). The Paris Club Agreement, reached with the<br />

other major official creditors (17 main creditor governments), provided that<br />

50 per cent of their outstanding commercial debt would be written off in<br />

stages over the succeeding three years, depending on Egypt carrying out its<br />

agreement with the IMF’s economic reform program (CBE, 1992, and<br />

Road, 1997).<br />

The second IMF agreement was concluded in 1993. At the end of the fiscal<br />

year 1996/1997, the third agreement triggered the final stake of commercial<br />

debt reduction and was supported by a further 24 months financial standby<br />

arrangement.<br />

Egypt implemented its economic reform program gradually.<br />

The success achieved by Egypt’s economic reform program can be<br />

summarized in the following points:<br />

- the Egyptian external debt has been decreased significantly from US $ 49<br />

billion in 90/91 to only US $ 26.6 billion in 97/98.<br />

- The debt ratio as a percentage of GDP has decreased significantly from<br />

151 per cent in 90/91 to only 37.7 per cent in 97/98.<br />

- The real interest rates became positive at 5 per cent in 97/98 com<strong>par</strong>ed<br />

with a negative rate of interest at 6 per cent in 90/91.<br />

- The rate of inflation has declined sharply from 23.6 per cent in 90/91 to<br />

only 4.1 per cent in 97/98.<br />

- With regard to the exchange rate, Egypt, like many other developing<br />

countries, had a multiple exchange rate system (MER). After the<br />

adoption of the economic reform program, the former multiple exchange<br />

rate system was replaced by a single-rate, market-oriented system with a<br />

managed floating of the Egyptian Pound for all public and private<br />

transactions. Although the Egyptian Pound depreciated during 1991, the<br />

FONDAZIONE CENSIS<br />

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