CENTRAL BANK OF EGYPT - الصفحة الرئيسية · The forex market transactions unfolded a surplus of US$ 0.8 billion during the period under review, against US$ 0.2 billion

CENTRAL BANK OF EGYPT

ECONOMIC REVIEW

Vol. 46 No. 1

2005/2006

Research, Development and Publishing Sector

This Review, issued in Arabic and English by the Research, Development and Publishing Sector, focuses on economic developments in ARE and in the world. Opinions expressed do not necessarily reflect those of the Bank.

Contents

Page Major Monetary and Financial Indicators National Developments Overview ………………………………………………………………. …. 1

1- Monetary and Banking Developments 1/1: Monetary and Banking Policy and Monetary Aggregates ……………............. 6 1/2: Banking Developments ……………………………………………………….. 19 2- Stock Exchange 2/1: Shares Market ………………………………………………………………… 28

2/2: Bonds Market ……………………………………………………………………. 34 3- Public Finance and Domestic Public Debt 3/1: Consolidated Fiscal Operations of the General Government ………………….. 38 3/2: Domestic Public Debt …………………………………………………………. 49 4- External Transactions 4/1: Foreign Exchange Market ……………………………………………………... 4/2: Balance of Payments ……………………………………………………………. 4/3: International Finance ……………………………………………………………. 5- Cotton 5/1: Domestic Developments …………………………………………………………. 5/2: International Developments ……………………………………………………… 6- Tourism 6/1: Tourists …………………………………………………………………………. 6/2: Tourist Nights …………………………………………………………………... External Developments 7- International Economic and Monetary Developments 7/1: Economic Developments ………………………………………………………… 7/2: Monetary Developments ……………………………………………………….. 8- International Economic Cooperation 8/1: International and Regional Meetings …………………………………………….. 8/2: IMF Activity during 2004/2005………………………………………………. Annex - Statistical Section ……………………………………………………………………

54 56 72

85 88

91 93

95 100

103 107

111

Major Monetary and Financial Indicators

July-September 2004-2005 2005-2006

End of Period

Cost of living index (1999/2000 = 100)

131.5

136.4

Wholesale prices index (1999/2000 = 100)

159.9

172.2

- Reserve money 127.4 151.4 - Domestic liquidity (M2) of the banking system ( 1) 450.9 514.8 - Money supply (M1) 80.7 99.9

• Currency in circulation outside the banking system

57.7 66.3

- Currency in circulation / money supply (%) 71.5 66.4 Deposits with Banks (2)

- Total deposits, of which: 479.5 534.8

• Business sector deposits (public and private) 87.5 102.3 • Household sector deposits 306.4 347.1

- Deposits in foreign currencies 156.1 151.9 (1) The CBE and banks. (2) Excluding the CBE.

Price Index

Money and Liquidity LE bn

Bank Credit * (1) - Total credit granted by banks 426.0 493.6

• Government securities and bills 126.1 143.4 • Other securities (including the external sector) 29.5 40.4 • Loans to the government and public economic

authorities 16.1 22.3

• Loans to the business sector ( public and private)

241.0 242.5

• Loans to the household sector and others 40.1 45.0 - Loans/deposits held with banks (%): 62.0 57.9

• Local currency 70.7 60.9 • Foreign currencies 43.8 50.5

- Portfolio of securities and treasury bills /deposits held with banks (%)

32.4 34.4

Foreign Assets and Liabilities of the Banking System ( 2) - Foreign assets 151.1 192.8 24.2** 33.5** - Foreign liabilities 98.1 88.9 15.7** 15.4**- Net foreign assets 53.0 103.9 8.5** 18.1**

Lending and discount rate at the CBE 10.00 10.00 Average interest rate on 91-day treasury bills 10.735 9.187 Interest rate on investment certificates (simple rate) 10.50 10.50 Average interest rate on 3-month deposits with banks 7.70 6.44 Average interest rate on one year or less loans with banks.

13.45 12.09

(1) Excluding the CBE. (2) The CBE and banks. * Includes loans, securities and bills ** In US$ billion

Discount and Interest Rates July-September 2004-2005 2005-2006

End of Period (Per Annum %)

US Dollar Exchange Rate Announced by the CBE

PT per US Dollar - Buying and selling exchange rates (period average) 613.5 621.5 - End of period 612.6 622.9 Consolidated Fiscal Operations of the General Government

2005/2006 (LE bn)

Revised

Estimates For FY

Actual for

July/Sept. - Total revenues 155.4 29.6 - Total expenditures 192.1 37.5 Cash Deficit 36.7 7.9 Net acquisition of financial assets 12.6 5.5 Overall Deficit/Surplus 49.3 13.4

Total Financing 49.3 13.4 - Domestic financing 64.6 8.1 - Banking 35.2 -4.4 - Non-banking 29.4 12.5 - Foreign borrowing 3.0 4.9 - Others -10.3 - - Financing effects for eliminations -4.2 2.1 - Revaluation differences - -0.3 - Net privatization proceeds 3.0 0.8 - Discrepancy -6.8 -2.2 - Cash deficit/GDP(%) 6.2 1.3 - Overall deficit /GDP (%) 8.3 2.3 - Expenditures /GDP (%) 32.4 6.3 - Revenues /GDP (%) 26.2 5.0 Domestic Public Debt End of June 2005 Sept. 2005 - Government domestic debt 349.2 355.1 - Public economic authorities debt 47.2 51.5 - NIB debt 114.4 114.9

Balance of Payments (US$ bn) July/September 2004/2005 2005/2006 Balance of Current Account & Transfers 1.5 0.3 Trade Balance (2.3) (3.2) Merchandise exports 3.1 4.0

Oil and its products % 39.2 53.0 Others % 60.8 47.0

Merchandise imports 5.4 7.2 Intermediate goods % 32.6 30.1 Investment goods % 26.8 25.6 Consumer goods % 13.1 11.7 Fuel, other raw materials and others % 27.5 32.6

Services Balance 2.7 2.2 Receipts 4.2 4.6

Of which: Transportation % 24.1 25.2 Travel % 50.5 50.2 Investment income % 3.7 8.4

Payments 1.5 2.5 Of which:

Transportation % 12.1 11.0 Travel % 18.2 16.1 Investment income % 23.3 20.8

Transfers 1.1 1.4 Official % 24.6 6.7 Private % 75.4 93.3

Capital and Financial Transactions (1.4) 1.8 Overall Surplus (Deficit) (0.1) 1.8 Outstanding External Debt at End of September 29.5 29.7

National Developments

- 1 -

Overview

Egypt’s economic performance witnessed a tangible improvement during July/Sept. of FY 2005/2006. Real GDP growth rate at factor cost rose to 5.3% (annual basis) during the period under review, against 4.8% during the same period of FY 2004/2005. This improvement was boosted by the financial and economic reforms vigorously adopted by the government As regards the monetary policy and its objective of maintaining price stability, the CBE has developed a new framework for the policy implementation. This framework relies on the use of the overnight interest rate on interbank transactions as the operational target of this policy, instead of the excess reserve balances of banks. This represents the CBE's main policy instruments, providing the outer bounds of a corridor within which the ceiling is the overnight interest rate on lending from the Bank, and the floor is the overnight deposit interest rate at the Bank. This system has become effective as of June 5, 2005. Also, the CBE gradually reduced the overnight lending rate, following the noticeable decline in inflation (only 1.0% during the statement period, against 1.9% during the period of comparison). It is to be noted that the CBE decision to set the overnight deposit rate at 9.5% in June 2005, signaled the downward trend of the interest rates on interbank transactions. Moreover, the Monetary Policy Committee (MPC) - during the period under review and at the time of preparing this Review - reduced the overnight deposit and lending rates several times, to stand at 8.0% and 10.0%, respectively, after its meeting in April 2006. Earlier, in its meetings in January 2006, the Committee lowered the CBE lending and discount rate from 10.0% to 9.0% annually. The aforementioned decisions of the MPC led to a decline in both the overnight interest rate on interbank transactions and the interest rate on loans and deposits at banks during the period under review. The gradual decline in the interbank interest rates was accompanied by an increase of LE 20.9 billion or 4.2% in domestic liquidity during the reporting period, against LE 16.0 billion and 3.7% during the period of comparison.

- 2 - As for the counterpart assets of domestic liquidity, net foreign assets at the banking system stepped up by LE 23.0 billion worth or 28.4%. Moreover, domestic credit rose by LE 3.2 billion or 0.7%, and so did the negative balance of the net balancing items by LE 5.3 billion. The bulk of the increase in domestic credit went to the private business sector, while net credit to the government sector fell by LE 2.8 billion. The forex market transactions unfolded a surplus of US$ 0.8 billion during the period under review, against US$ 0.2 billion in the corresponding period. This surplus was a result of a US$ 3.6 billion increase in resources, to reach US$ 6.7 billion, and a US$ 3.0 billion increase in utilizations, to post US$ 5.9 billion. This contributed to the growing appreciation of the LE vis-à-vis the US dollar, as it rose by 0.5%. As such, the average US dollar exchange rate (buy) reached pt 575.2 at end of September 2005, compared with pt 577.9 at end of June 2005. Accordingly, the CBE managed to strengthen its foreign exchange reserves. Its net international reserves (NIR) went up by US$ 1.8 billion during the period, to reach US$ 21.1 billion at end of September 2005. NIR remained on the rise, (at the time of preparing this Review) posting US$ 22.8 billion at end of April 2006. Through its role in maintaining the relative stability of inflation and the continuous improvement of the LE, the monetary policy adopted by the CBE has contributed to the continuous preference of the local currency as a saving instrument. This was reflected in the higher ratio of local currency deposits to total deposits with banks from 67.3% at end of September 2004 to 72.3% at end of September 2005. Moreover, the monetary policy helped provide a favorable investment climate, which contributed to spurring the economic growth. Concerning the performance of the stock market, it significantly improved during the period of statement. CMA statistics revealed an increase in all indicators of dealing during the period. Hence, the number of transactions rose from 436 thousand to 1.0 million, and so did the trading volume from 525 million papers to 1.2 billion, and the trading value from LE 9.9 billion to LE 42.5 billion. The robust performance of the capital market covered both the shares and bonds markets.

- 3 - Transactions of foreign investors on the Egyptian Exchange increased by LE 16.3 billion during the period, to register LE 21.6 billion, (against LE 5.3 billion in the preceding corresponding period). Dealings were concentrated in Egyptian pound securities. Regarding the fiscal policy, fundamental modifications were made according to the international standards to the classification of the consolidated fiscal operations of the general government. Also, estimates for these operations were set, taking into consideration social dimensions and the increase in the State's financial resources as a reflection of the tax and customs reforms adopted recently. Follow-up of the execution of such operations (the budget sector, NIB and SIFs) during July/Sept., 2005/2006 revealed that total revenues amounted to LE 29.6 billion and total expenditures LE 37.5 billion. Meanwhile, the cash deficit posted LE 7.9 billion and net acquisition of financial assets registered LE 5.5 billion. Accordingly, the overall deficit reached LE 13.4 billion. Regarding the fiscal operations of the budget sector (the administrative system, local administration and service authorities), total revenues amounted to LE 24.6 billion and total expenditures LE 32.3 billion. This unfolded a cash deficit of LE 7.7 billion. With the addition of this deficit to the net acquisition of financial assets, the overall deficit will reach LE 8.1 billion. As a reflection of the above developments, total domestic public debt rose by LE 10.7 billion during the reporting period, to reach LE 521.5 billion at end of September 2005, 68.1% of which was owed by the government. Turning to the transactions with the external sector during July/Sept., 2005/2006, the current account surplus narrowed to only US$ 326.7 million, against US$ 1.5 billion during the corresponding period a year earlier. This was an outcome of a wider trade deficit and lower services surplus, on the one hand, and higher unrequited transfers (net) on the other. As such, the trade deficit widened further by 41.8% due to a 34.8% rise in merchandise imports, outpacing the 29.6% growth in the proceeds of merchandise exports. The pick-up in almost all merchandise exports owes much to the strong exports of oil and its products, driven by higher exported quantities and the rise in world oil prices. The services

- 4 - surplus dwindled by 18.5%, as a result of higher service payments (61.3%). Meanwhile, service receipts stepped up by 10.5% due to the rise in most of their items, mainly travel & transportation; and investment income. Moreover, net unrequited transfers increased during the period as a chief outcome of the notable rise in the cash remittances of Egyptians working abroad. Capital and financial transactions unfolded a net inflow of US$ 1.8 billion during the period (compared with a net outflow of US$ 1.4 billion during the period of comparison). Against this background, the BOP realized an overall surplus of US$ 1.8 billion during the period (against an overall deficit of US$ 103.1 million). Concerning international finance, resource inflows rose by US$ 3.4 billion, to reach US$ 4.6 billion during July/Sept. 2005/2006, mainly due to the pickup in foreign investment in Egypt (direct and portfolio). External debt, expressed in US dollar, reached US$ 29.7 billion (mostly owed by the public sector) at end of September 2005, up by US$ 0.7 billion compared with end- June 2005. This increase was an outcome of a US$ 0.8 billion rise in net disbursements of loans and facilities and a US$ 0.1 billion decline in the balance of external debt due to the depreciation of most currencies of borrowing vis-à-vis the US dollar at end of September 2005. The ratio of external debt service to current receipts (including private and official transfers) posted 7.6% during the period of statement, down from 8.6% in the period of comparison. Moreover, the ratio of debt service to total export proceeds of goods and services fell from 9.9% to 8.8%. As regards the tourist flows to Egypt during July/Sept., 2005/2006, CAPMAS statistics revealed that tourism revenues rose by 10.0%, reflecting a 13.3% increase in the estimate of the average tourist spending a night and a 1.6% rise in his average stay, compared with the same period of FY 2004/2005. Concerning the other key reforms taken during the period, a number of measures were adopted to implement the banking system reform plan. These included the merger of the branch of American Express Bank in the Egyptian

- 5 - American Bank; the merger of Misr America International Bank in the Arab African International Bank; the increase of the issued and paid up capital of the Bank of Alexandria; and the delisting of the branches of the National Bank of Sudan, Jammal Trust Bank and the Rafidain Bank of the CBE records. Moreover, the Executive Regulations of the Law of Protection of Competition and Anti-trust Practices were promulgated, and the Board of Directors of the Agency of Protection of Competition and Anti-trust Practices was formed. The period also witnessed the constitution of the committee of the Export Development Fund. Moreover, the Council of Trustees of the General Authority for Investment and Free Zones (GAFI) was formed for a one-year term, with the purpose of studying and solving the problems of investment and providing consultations and proposals it deems necessary to stimulate investments.

- 6 -

1- Monetary and Banking Developments 1/1: Monetary and Banking Policy and

Monetary Aggregates In pursuit of its role in realizing price stability as the overriding objective of its monetary policy, the CBE has developed a new framework for policy implementation. This framework relies on the use of overnight interest rate on interbank transactions, instead of the excess reserve balances of banks, as an operational target of this policy. This represents the CBE main policy instruments, providing the outer bounds of a corridor within which the ceiling is the overnight interest rate on lending from the Bank, and the floor is the overnight deposit interest rate at the Bank. This system has been applied as of June 5, 2005. In its first meeting, the CBE’s Monetary Policy Committee (MPC) set the overnight deposit and lending rates at 9.5% and 12.5%, respectively, as of the said date. Moreover, the Central Bank announced, for the first time, this policy in a statement released in this respect. In its regular meetings, the Committee considers, according to the requirements of price stability, whether to adjust or keep the overnight deposit and lending rates unchanged. The CBE introduced, as of August 2005, a new instrument dubbed “the CBE notes”. These notes are issued with a maturity spanning up to two years and are used to absorb banks' excess liquidity, instead of the reverse repos of treasury bills. The CBE began, as of June 2005, to gradually reduce the overnight lending rate, following the noticeable decline in the CPI- based inflation rate (only 1.0% during July/Sept. 2005 against 1.9% during July/Sept. 2004). It is to be noted that the CBE decision to set the overnight deposit rate at 9.5% in June 2005 signaled the downward trend of inter-bank interest rates. Moreover, the MPC reduced, in Sept. 2005, the overnight deposit and lending rates by 0.5% and 1.0%, to reach 9.0% and 11.5%, in order. It is worth mentioning that at the time of printing this Review, the Committee cut these two rates a number of times, to reach 8.0% and 10.0%, respectively. Earlier, in its meetings in January 2006, the Committee reduced the CBE lending and discount rate from 10.0% to 9.0% annually.

- 7 - As a reflection of the aforementioned decisions of the MPC, the overnight interest rates on inter-bank transactions declined, as their weighted average posted 9.32% in Sept. 2005 against 9.64% in July 2005 and 9.57% during July/Sept., 2005/2006. These decisions were conducive to a drop in the interest rates on deposits and loans at banks.

CBE Lending and Discount Rate and Banks’ Average Interest Rates on Deposits and Loans

(Annually %)

End of 2004

June Sept. 2005

June Sept. CBE lending & discount rate 10.0 10.0 10.0 10.0 Three-month deposits 7.68 7.70 7.61 6.44 Six-month deposits 7.79 7.92 7.67 7.61 One year deposits 7.77 7.90 7.70 7.87 Loans of one year or less 13.27 13.45 13.35 12.09

The gradual reduction in the inter-bank interest rates was accompanied by an increase of 4.2% in domestic liquidity during the period under review, against 3.7% during the period of comparison. As regards the forex market, the Egyptian pound exchange rate continued to improve against the US dollar in the inter-bank foreign exchange market during July/Sept., 2005/2006. The US dollar weighted average reached LE 5.75 at end of September 2005, compared with LE 5.78 at end of June 2005. This was ascribed to the higher resources and better regulation of the market. Moreover, net international reserves (NIR) rose from US$ 19.3 billion at end of June 2005 to US$ 21.1 billion at end of September 2005, and continued to increase during the time of preparing this Review, to reach US$ 22.8 billion at end of April 2006. The monetary policy pursued by the CBE contributed to a favorable investment climate, and hence, a higher economic growth, under an appropriate degree of monetary stability. As such, economic growth rate (annual basis) reached 5.3% during July/Sept., 2005/2006, against 4.9% in the same period a year earlier.

- 8 - Moreover, the ratio of private investments to total investments stepped up to 58.5% during the period under review, compared with 52.5% during the period of comparison. Yet, it is hoped that this ratio will further increase, given a more effective role to be played by the private sector in the development process.

1/1/1: Reserve Money

Reserve money decreased by LE 26.4 billion or 14.9% during July/Sept. of FY 2005/2006 (against a rise of LE 8.9 billion or 7.5% during the corresponding period of the previous FY), to reach LE 151.4 billion at end of Sept. 2005. The decrease was an outcome of the LE 29.3 billion drop in banks' local currency deposits at the CBE and the LE 2.9 billion increase in currency in circulation outside the CBE. The decline in banks' local currency deposits at the CBE was ascribed to the modifications made on the accounting treatment of the balance of the Egyptian TB reverse repos according to the CBE Board of Directors’ decision No. 1501 issued on August 2, 2005. As per this treatment, the balance of reverse repos included in the government portfolio of the CBE balance sheet was crossed out, and the value of this balance was deducted from banks' local currency deposits at the CBE. The decision also stated that as far as banks’ balance sheets are concerned, these repos are to be added –to the item “treasury bills” and deducted from the balances held at the CBE.

- 9 -

Reserve Money and Counterpart Assets (LE mn)

Change during July/Sept. 2004/2005 2005/2006

Balances at End of Sept. 2005 Value % Value %

A- Reserve Money 151414 8928 7.5 (26408) (14.9) - Currency in circulation

outside the CBE 70133 1793 3.0 2892 4.3 - Banks' deposits in local

currency 81281 7135 12.1 (29300) (26.5) B- Counterpart Assets 151414 8928 7.5 (26408) (14.9) - Net Foreign Assets 49049 281 2.9 11754 31.5 - Foreign Assets 118635 (115) (0.1) 9897 9.1 Gold 4500 - 0.0 - 0.0 Foreign securities 16035 1073 6.3 (630) (3.8) Foreign currencies 98100 (1188) (1.8) 10527 12.0 - Foreign Liabilities 69586 (396) (0.5) (1857) (2.6) - Net Domestic Assets 102365 8647 8.0 (38162) (27.2) - Claims on the

Government (Net) 102168 7642 7.7 (20096) (16.4) Claims, of which: 179143 29159 16.1 (48224) (21.2)

Government securities 164907 30000 18.2 (43114) (20.7) Deposits 76975 21517 26.3 (28128) (26.8) - Claims on Banks (Net) (8077) (795) 2.2 13906 (63.3) Claims 17000 (303) (3.2) 5428 46.9 Foreign currency deposits 25077 492 1.1 (8478) (25.3) - Net Balancing Items 8274 1800 4.0 (31972) (79.4) Assets 48015 4489 8.3 (1056) (2.2) Liabilities, of which: 39741 2689 27.9 30916 350.3 Equities 2513 - 0.0 182 7.8 Provisions 302 68 22.1 - 0.0

A breakdown of the counterpart assets of reserve money shows that net domestic assets went down by LE 38.2 billion during the period, while net foreign assets augmented by LE 11.8 billion worth.

- 10 -

The decline in net domestic assets was ascribed, in turn, to a decrease in the

CBE's net claims on the government by LE 20.1 billion. This was an outcome of lower CBE claims on the government by LE 48.2 billion (due to the aforementioned accounting treatment) on the one hand, and lesser government deposits therewith by LE 28.1 billion, on the other. The decline in the said deposits was because part of the TBs counterpart deposits held for the account of the Ministry of Finance fell due, and another part was subject to early amortization). Moreover, net balancing items (net unclassified assets & liabilities and capital accounts) fell by LE 32.0 billion, whereas net claims on banks rose by LE 13.9 billion, due to higher CBE claims on them (by LE 5.4 billion) and their lower foreign currency deposits at the CBE (by LE 8.5 billion worth). Net foreign assets of the CBE increased during the period, as a reflection of the rise in its foreign assets by LE 9.9 billion worth and the decline in its foreign liabilities by LE 1.9 billion worth.

1/1/2: Banknote Issue

The balance of banknote issue (including subsidiary coins) augmented by LE 3.5 billion or 5.1% during July/Sept., 2005/2006, (against LE 2.0 billion and 3.4% in the corresponding period of the preceding FY), to reach LE 71.2 billion at end of Sept. 2005.

Banknote Issue* (LE mn)

Annual Change Change during July/Sept.

End of

Balance of Banknote

Issue Value % Value % June 2004 59922 7490 14.3 Sept. 2004 61958 7071 12.9 2036 3.4 June 2005 67753 7831 13.1 Sept. 2005 71220 9262 14.9 3467 5.1

* Including subsidiary coins issued by the Ministry of Finance

- 11 -

The increase in banknote issue led, in turn, to an LE 2.9 billion increase or

4.3% in the currency in circulation outside the CBE, bringing it up to LE 70.1 billion at end of September 2005.

A breakdown of currency in circulation by denomination shows increases in

the relative importance of the LE 100 note, to reach 39.2% at end of Sept. 2005 against 37.7% at end of June 2005, and of the LE 50 note to 37.1% against 36.2%. Conversely, the relative importance of the LE 20, 10, 5 and 1 notes retreated. Meanwhile, the relative importance of the denominations less than one pound remained unchanged. The increase in the relative importance of the LE 100 and 50 notes was attributed to the continuous rise in prices, though at lower pace. Accordingly, the average value per note climbed to LE 20.97 at end of Sept. 2005 from LE 19.59 at end of June 2005.

Currency in Circulation outside the CBE* (LE mn)

June 2005 Sept. 2005 Change during July/Sept. Denominations

Value Relative

ImportanceValue

Relative Importance 2004/2005 2005/2006

Total 67236 100.0 70132 100.0 3.0 4.3 Subsidiary Coins 226 0.3 228 0.3 0.9 0.9 PT 25 118 0.2 113 0.2 (12.0) (4.2) PT 50 217 0.3 209 0.3 (8.5) (3.7) LE 1 512 0.8 483 0.7 (7.3) (5.7) LE 5 1251 1.9 1149 1.6 4.1 (8.2) LE 10 4999 7.4 4646 6.6 (1.5) (7.1) LE 20 10246 15.2 9843 14.0 3.2 (3.9) LE 50 24348 36.2 26003 37.1 (0.7) 6.8 LE 100 25319 37.7 27458 39.2 9.2 8.4

* Representing the difference between banknote issue and the cash at the CBE's vaults

- 12 - 1/1/3: Clearing Houses Activity and SWIFT Local Service

The following table shows the number and value of local banking transfers (fin-copy) executed in LE through the SWIFT system during the period under review and the period of comparison.

SWIFT Local Service Activity

(LE mn)

Executed Transfers Change during the Period

Number

(unit) Value

(LE mn) Number Value

July/Sept. 2004/2005 July/Sept. 2005/2006

72951 88713

293796 352352

10431 15762

24249 58556

As for interbank transactions in US dollar, according to the Fin-Copy system introduced as of Sept. 19, 2004, the number of executed transactions recorded 3114, at a value of US$ 8.3 billion during July/Sept. 2005/2006.

Statistics of Cairo, Alexandria and Port Said clearing houses revealed an increase in the number and value of exchanged cheques during the period. (See the following table)

CBE Clearing Houses Activity

Number of Cheques

Value of Cheques Change During

(000’s) (LE mn) Number Value July/Sept. 2004/2005 2233 63435 (10.4) (3.6) July/Sept. 2005/2006 2290 69626 2.6 9.8

- 13 -

As shown in the table, the average value per cheque rose to LE 30.4 thousand during the period under review, from LE 28.4 thousand in the period of comparison.

1/1/4: Domestic Liquidity and Affecting Factors

Domestic liquidity (M2) rose by LE 20.9 billion or 4.2% during July/Sept.

of FY 2005/2006 against LE 16.0 billion and 3.7% during the corresponding period of the previous FY, to reach LE 514.8 billion at end of September 2005.

Domestic Liquidity Structure (LE mn)

Change during July/Sept. End of Sept. 2005

2005/2006 2004/2005 Relative Importance

Balances

% Value % Value 4.2209383.7 16003 100.0 514822Domestic Liquidity (M2)

11.4102433.9 3054 19.4 99928Money Supply (M1)

5.233063.1 1733 12.9 66335- Currency in circulation outside the banking system

26.069376.1 1321 6.5 33593- Local currency demand deposits 2.6106953.6 12949 80.6 414894 Quasi-Money

2.674473.4 7969 56.4 290467-Time and Saving Deposits in Local Currency

2.732484.0 4980 24.2 124427- Foreign Currency Deposits 5.49856.3 1023 3.7 19125 - Demand deposits 2.222633.7 3957 20.5 105302 - Time and saving deposits

The rise in domestic liquidity during the period came as a reflection of the

increase in money supply (M1) and quasi-money. Money supply rose by LE 10.2 billion or 11.4%, (compared with LE 3.1 billion and 3.9%) reaching LE 99.9 billion or 19.4% of total domestic liquidity at end of September 2005.

- 14 - The pick up in money supply reflected an increase in the currency in circulation outside the banking system by LE 3.3 billion or 5.2%, and in the LE demand deposits by LE 6.9 billion or 26.0% because of the growth in the deposits of the private business, household and public business sectors.

Quasi-money increased by LE 10.7 billion or 2.6%, (against LE 12.9 billion and 3.6% during the corresponding period) to reach LE 414.9 billion or 80.6% of total domestic liquidity at end of September 2005.

The increase in quasi-money reflects the growth in time and saving deposits in local currency by LE 7.4 billion or 2.6%, to reach LE 290.5 billion. The rise was mostly concentrated in the deposits of the household sector that grew by LE 6.6 billion during the period. Likewise, foreign currency deposits (demand and time & saving) went up by LE 3.3 billion worth or 2.7%, to stand at LE 124.4 billion worth or 24.2% of total domestic liquidity at end of September 2005. The increase was mainly due to higher deposits of the private business sector (by LE 2.8 billion worth).

Domestic Liquidity(End of September)

04080

120160200240280320360400440480520560

2002 2003 2004 2005

Foreign currencydeposits

Time &saving depositsin local currency

Currency in circulationoutside the bankingsystemDemand deposits inlocal currency

L.E. bn

- 15 - The LE deposits still accounted for the bulk of total deposits at banks, with a share of 72.3% at end of September 2005, against 67.3% at end of September 2004. Meanwhile, foreign currency deposits represented 27.7% against 32.7% of total deposits. This indicates the preference for the local currency as a saving instrument and as a store of value, a matter that reduced dollarization. This was mainly associated with a continuous relative stability in inflation and an improvement in the value of the Egyptian pound versus the US dollar, as well as a higher interest rate on LE deposits compared with those in US dollar.

04080

120160200240280320360400440480

1998 1999 2000 2001 2002 2003 2004 2005

Non-Government Deposits at Banks(End of September)

LE bn

Foreign currencies

Local currency

- 16 -

Counterpart Assets of Domestic Liquidity (LE mn)

Change during July/Sept. End of Sept. 2005 2005/2006 2004/2005

% Value % Value

Relative

Importance

Balances

4.220938 3.7 16003100.0 514822 Counterpart Assets of Domestic Liquidity

28.423000 17.2 778020.2 103913 Net Foreign Assets 31.511756 2.9 2819.5 49050 -The CBE 25.811244 21.2 749910.7 54863 - Other banks 0.7 3246 2.4 996991.3 470017 Domestic Credit

(1.7)(2794) 7.4 935030.5 157095 Government (net) 2.2832 2.7 9527.4 38253 Public business sector 1.53394 (0.7) (1662)45.0 231589 Private business sector 4.41814 3.6 13298.4 43080 Household sector 9.9(5308) 5.4 (1746)-11.5 -59108 Other items (Net)

As for the counterpart assets of domestic liquidity, both net foreign assets and domestic credit exercised an expansionary effect, while net balancing items had a contractional one.

Domestic credit rose by only LE 3.2 billion or 0.7%, during the period (against LE 10.0 billion and 2.4% during the corresponding period), to reach LE 470.0 billion at end of Sept. 2005. The increase was mainly concentrated in the credit to the private business sector, which mounted by LE 3.4 billion or 1.5%, to reach LE 231.6 billion or 49.3% of total domestic credit at end of Sept. 2005.

Credit to the household sector also moved up by LE 1.8 billion or 4.4%, to post LE 43.1 billion or 9.2% of total credit at end of Sept. 2005. Credit to the public business sector increased by only LE 0.8 billion or 2.2%, bringing its debt to LE 38.3 billion or 8.1%.

- 17 - Concerning the credit provided to the government sector (net basis), it

declined by LE 2.8 billion or 1.7% during the period (against an increase of LE 9.4 billion or 7.4% during the corresponding period of the previous FY), to reach LE 157.1 billion or 33.4% of total domestic credit at end of Sept. 2005. The decline in the net credit to the government sector was mainly because part of the treasury bills fell due and another part was subject to early amortization. This was reflected, in turn, on the volume of credit and deposits, with loans to the government and the banking system's holdings of government securities and treasury bills decreasing by LE 32.7 billion. This is in addition to the LE 29.9 billion drop in the government deposits, as an outcome of the LE 35.9 billion decline in its LE deposits and the LE 6.0 billion rise in those in foreign currency.

Net foreign assets of the banking system, expressed in Egyptian pound, remarkably increased by LE 23.0 billion or 28.4%, against a rise of only LE 7.8 billion and 17.2%, to reach LE 103.9 billion at end of September 2005.

Domestic Credit (By Sector) (End of September)

04080

120160200240280320360400440480

2002 2003 2004 2005

Government (net)

Private businesssector

Public businesssector

Household sector

L.E. bn

- 18 -

Net Foreign Assets of the Banking System

The negative balance of other items (net) increased during the period by LE 5.3 billion, to post LE 59.1 billion at end of September 2005. The increase was due to the strengthening of capital, reserves and provisions.

(LE mn)June 2005 Sept. 2005

Foreign Foreign Change in Net

during July/Sept.

Assets Liabilities Net Assets Liabilities Net 2004/2005 2005/2006 Total 174328 93415 80913 192803 88890 103913 7780 23000 - CBE 108737 71443 37294 118636 69586 49050 281 11756 - Banks 65591 21972 43619 74167 19304 54863 7499 11244

- 19 -

1/2: Banking Developments

1/2/1: Overview of Banks' Aggregate Financial Position

During July-Sept. of FY 2005/2006, the aggregate financial position of banks rose by LE 38.7 billion or 5.5% against LE 29.3 billion or 4.6% during the corresponding period of the previous FY, to reach LE 743.8 billion at end of September 2005.

Aggregate Financial Position of Banks

(LE mn)

End of June 2005 September 2005 Change during July-Sept.

2004/ 2005

2005/ 2006

Value Relative Importance Value Relative

Importance % %

Cash 6594 0.9 6026 0.8 4.5 (8.6)Securities & investments 172177 24.4 183800 24.7 13.2 6.8Balances at banks abroad 51204 7.3 59657 8.0 14.0 16.5Balances at CBE 109773 15.6 107550 14.5 (6.7) (2.0)Balances at banks in Egypt 15213 2.1 17839 2.4 (9.5) (17.3)Loan & discount balances 308195 43.7 309843 41.7 0.3 0.5Other assets 41990 6.0 59090 7.9 35.6 40.7

(Assets = Liabilities) 705146 100.0 743805 100.0 4.6 5.5

Capital 22949 3.3 24444 3.3 2.7 6.5Reserves 12419 1.8 12141 1.6 (5.2) (2.2)Provisions 49541 7.0 50326 6.8 5.1 1.6Bonds & long-term loans 14255 2.0 14928 2.0 (5.2) 4.7Obligations to banks abroad 12262 1.7 9814 1.3 (9.1) (20.0)Obligations to CBE 8011 1.1 15671 2.1 0.8 95.6Obligations to banks in Egypt 14660 2.1 15167 2.0 (10.0) 3.5Deposits 519649 73.7 534810 71.9 3.9 2.9Other liabilities 51400 7.3 66504 9.0 32.4 29.4

- 20 -

On the liabilities side, the increase was a chief result of the rise in deposits by LE 15.2 billion or 2.9% and other liabilities by LE 15.1 billion. Meanwhile, the increase in assets was mainly due to the growth of investments in securities and TBs by LE 11.6 billion or 6.8% and other assets by LE 17.1 billion. The step-up in banks’ investments in securities and TBs was an outcome of their higher investments in CBE notes (LE 24.8 billion), equity participation (LE 4.5 billion), government bonds (LE 3.5 billion), and foreign securities (LE 0.3 billion worth). Meanwhile, TBs declined by LE 21.3 billion or 22.9%, to reach LE 71.7 billion and so did the non-government bonds by LE 0.2 billion.

Portfolio Structure (%)

June 2005 September 2005

End of In Local

Currency

In Foreign

CurrenciesTotal

In Local

Currency

In Foreign

Currencies Total

Local Investments 81.8 12.4 94.2 82.9 11.5 94.4Treasury Bills 54.0 0.0 54.0 39.0 0.0 39.0Government Bonds 15.6 9.6 25.2 16.5 9.0 25.5Non-government Bonds 3.4 1.1 4.5 3.0 1.2 4.2equity participations 8.8 1.7 10.5 10.9 1.3 12.2CBE notes - - - 13.5 - 13.5Foreign Securities 0.0 5.8 5.8 0.0 5.6 5.6Total 81.8 18.2 100.0 82.9 17.1 100.0Total Portfolio (LE bn)

140.9

31.3

172.2 152.4

31.4

183.8

Transactions of banks in Egypt with their correspondents abroad unfolded a rise in their net credit position abroad by LE 10.9 billion worth, to reach LE 49.8 billion worth at end of September 2005.

- 21 -

1/2/2: Inter-bank Money Market in Egypt The volume of transactions in the inter-bank money market rose by LE 2.6

billion – in terms of deposits – bringing its total deposits up to LE 17.8 billion at end of September 2005. This was attributed to an increase in local currency deposits by LE 3.0 billion and a decline in foreign currency deposits by LE 0.4 billion worth.

Volume of Inter-bank Money Market in Egypt

(LE mn) Change during July/Sept.

End of June 2005 Sept. 2005 2004/2005 2005/2006 Value % Value %

Total 15213 17839 (2040) (9.5) 2626 17.3 Balances in local currency 7201 10190 (1102) (9.9) 2989 41.5 Balances in foreign currencies 8012 7649 (938) (9.2) (363) (4.5)

1/2/3: Deposits Total deposits at banks (including government deposits) reached LE 534.8 billion or 71.9% of the aggregate financial position of banks at end of September 2005, with an increase of LE 15.2 billion or 2.9% during the period (against LE 17.8 billion and 3.9% during the corresponding period of the previous FY).

Most of the increase during the reporting period was in local currency deposits that rose by LE 13.9 billion or 3.8% to LE 382.9 billion or 71.6% of total deposits at end of September 2005. Meanwhile, foreign currency deposits grew by only LE 1.3 billion worth or 0.9%.

- 22 -

A breakdown of deposits by maturity indicates that time and saving deposits

in both local and foreign currencies still represent the bulk of deposits. As such, time and saving deposits in local currency mounted by LE 6.9 billion or 2.1%, to reach LE 331.6 billion or 86.6% of total local currency deposits. Likewise, those in foreign currencies increased by the equivalent of LE 0.6 billion or 0.5%, to reach LE 121.1 billion worth or 79.7% of total foreign currency deposits.

Banks’ Deposits by Type and Currency (LE mn)

Change during July/September

End of June 2005 Sept. 2005 2004/2005 2005/2006 Value % Value % Total Deposits 519649 534810 17790 3.9 15161 2.9In Local Currency 369067 382944 12472 4.0 13877 3.8

Demand 31606 39034 496 1.8 7428 23.5Time and saving 324664 331586 12003 4.5 6922 2.1Blocked or retained 12797 12324 (27) (0.2) (473) (3.7)

In Foreign Currencies 150582 151866 5318 3.5 1284 0.9

Demand 19951 20950 (299) (1.5) 999 5.0Time and saving 120468 121106 4787 4.0 638 0.5Blocked or retained 10163 9810 830 7.4 (353) (3.5)

Time and saving deposits and saving systems at banks increased by LE 7.9 billion or 2.9%, to reach LE 277.8 billion at end of September 2005. The increase was mainly ascribed to a rise in saving system deposits by LE 6.4 billion (as an outcome of a rise in the saving systems for 3 years or more by LE 6.7 billion and a decline in those of less than 3 years by LE 0.3 billion) and an LE 1.5 billion edge-up in non-government time and saving deposits.

- 23 -

Time and Saving Deposits and Saving Systems at Banks by Maturity

(LE mn) Change during July/Sept.

June 2005 Sept. 2005 2004/2005 2005/2006 End of

Value % Value %

Total (1+2) 269861 277761 8054 3.6 7900 2.91- Non-Gov. Time &

Saving Deposits in Local Currency, of which: 174137 175582 (4098) (2.4) 1445 0.8

a. Free 61351 63667 (946) (1.5) 2316 3.8 b- Blocked 8096 7736 910 11.8 (360) (4.4)c- Saving Accounts 102817 101615 (2668) (2.8) (1202) (1.2)d- Others 1873 2564 (1394) (58.5) 691 36.92- Saving Systems 95724 102179 12152 22.7 6455 6.7

• Less than 3 years 7348 7069 (147) (1.9) (279) (3.8)• 3 years or more 88376 95110 12299 27.0 6734 7.6

A breakdown of local currency deposits by sector indicates that the household sector contributed more than half of the increase. Its deposits grew by LE 7.9 billion or 3.1%, to reach LE 261.7 billion or 68.3% of total local currency deposits. As for foreign currency deposits, they increased as a main result of the rise in those of the private business sector by LE 2.7 billion worth.

- 24 -

Deposits at Banks by Sector

1/2/4: Lending Activity

During July/Sept., 2005/2006, banks’ credit facilities increased by LE 1.6 billion or 0.5%, against LE 0.9 billion and 0.3% during the corresponding period of the previous FY, reaching thereby LE 309.8 billion at end of September 2005. The increase was due to a rise in foreign currency facilities by LE 1.7 billion worth and the decline in local currency facilities by LE 43 million.

(LE mn) December/Change during July

June 2005 Sept. 2005 2004/2005 2005/2006 End of Value % Value %

Total 519649 534810 17790 3.9 15161 2.9 In Local Currency 369067 382944 12472 4.0 13877 3.8 Government Sector 57649 56693 3547 6.6 (956) (1.7) Public Business Sector 16727 17548 (281) (1.8) 821 4.9 Private Business Sector 39668 45605 1531 4.3 5937 15.0 Household Sector 253865 261712 7803 3.8 7847 3.1 External Sector 1158 1386 (128) (17.3) 228 19.7 In Foreign Currencies 150582 151866 5318 3.5 1284 0.9 Government Sector 27252 26286 361 1.4 (966) (3.5) Public Business Sector 4195 5087 64 1.9 892 21.3 Private Business Sector 31337 34075 2542 8.6 2738 8.7 Household Sector 85813 85425 2337 2.6 (388) (0.5) External Sector 1985 993 14 1.8 (992) (50.0)

- 25 -

Banks' Credit

(LE mn) Change during July-Sept.

End of June 2005 Sept. 2005 2004/2005 2005/2006 Value % Value % Total 308195 309843 913 0.3 1648 0.5In Local Currency 233141 233098 500 0.2 (43) 0.0Government sector 10938 10705 (317) (3.2) (233) (2.1)Public business sector 30164 31498 900 3.3 1334 4.4Private business sector 152193 149247 (1455) (0.9) (2946) (1.9)Household sector 39354 41092 1348 3.7 1738 4.4External sector 492 556 24 6.2 64 13.0In Foreign Currencies 75054 76745 413 0.6 1691 2.3Government sector 11080 11575 185 3.0 495 4.5Public business sector 7078 6575 40 0.5 (503) (7.1)Private business sector 53502 55225 234 0.5 1723 3.2Household sector 1913 1988 (20) (1.9) 75 3.9External sector 1481 1382 (26) (2.0) (99) (6.7)

The decline in local currency credit facilities was mainly due to the decrease

in loans to the private business sector by LE 2.9 billion and to the government sector by LE 0.2 billion. Meanwhile, loans extended to the household sector increased by LE 1.7 billion and to the public business sector by LE 1.3 billion. As for the rise in foreign currency facilities, it was chiefly ascribed to the increase in loans to the private business sector.

- 26 -

Credit by Economic Activity (LE mn)

Change during July/Sept.

End of June 2005 Sept. 2005 2004/2005 2005/2006 Value % Value %

Total 308195 309843 913 0.3 1648 0.5

In Local Currency 233141 233098 500 0.2 (43) 0.0

Agriculture 5822 5686 (353) (7.0) (136) (2.3)

Manufacturing 81844 81183 2914 3.7 (661) (0.8)

Trade 45648 44512 (2915) (6.0) (1136) (2.5)

Services 59870 59930 (518) (0.9) 60 0.2

Unclassified sectors

(including the household) 39957 41787 1372 3.8 1830 4.6


Agriculture 619 874 (4) (0.7) 255 41.2

Manufacturing 34957 35582 (6) (0.0) 625 1.8

Trade 11893 12093 617 4.9 200 1.7

Services 24188 24824 (182) (0.8) 636 2.6

Unclassified sectors

(including the household) 3397 3372 (12) (0.5) (25) (0.7) A breakdown of credit facilities by economic activity shows that the

manufacturing sector received 37.7% of total facilities at end of September 2005. Meanwhile, 27.3% of the total went to the services sector; 18.3% to the trade sector; 14.6% to unclassified sectors and 2.1% to the agriculture sector.

- 27 -

A breakdown of loans and advances by maturity and currency shows an expansion in banks’ long-term loans (more than one year) during the reporting period. Loans and advances of maturities of more than one year increased by LE 3.2 billion or 2.6%, to reach LE 123.2 billion or 39.9% of the total. This increase was an outcome of the rise in foreign currency loans by LE 1.9 billion worth and in local currency loans by LE 1.3 billion.

Loans and advances of maturities of less than one year declined by LE 1.2

billion or 0.6%, to stand at LE 185.4 billion or 60.1% of total loans and advances.

Loans and Advances by Maturity and Currency*

(LE mn)

.Sept/ulyChange during J

End of June 2005 Sept. 2005 2004/2005 2005/2006 Value % Value % Total 306652 308608 764 0.3 1956 0.6

One Year or Less 186579 185390 (180) (0.1) (1189) (0.6)

In Local Currency 146972 145852 (248) (0.2) (1120) (0.8)

In Foreign Currencies 39607 39538 68 0.2 (69) (0.2)

More Than One Year 120073 123218 944 0.9 3145 2.6

In Local Currency 85110 86398 627 0.8 1288 1.5


* Excluding discounted commercial papers.

- 28 -

2- Stock Exchange

Transactions on the Stock Exchange during the first quarter of 2005/2006 were noticeably active, thanks to the policies and measures adopted by the government to complete the prerequisites for creating an enabling investment climate. To this end, further decisions and measures were taken during the period, mainly the Prime Minister Decree No. 1430 for 2005 concerning the formation of a board of trustees for the General Authority for Investment and Free Zones (GAFI). This Board is to be responsible for studying and resolving investment problems and providing relevant proposals, in consistency with the development strategy of domestic and foreign investment in Egypt. The Minister of Investment issued Decree No. 282 for 2005, in amendment of the Executive Regulations of Law No. 159 for 1981 of Joint Stock Companies, Partnerships Limited by Shares and Limited Liability Companies. Amendments to the said Law were related to the incentive systems of employees and managers and the privileged conditions for stock granting and selling.

In order to boost activity in the stock market and increase liquidity, the Board

of Directors of the Capital Market Authority decided to introduce a new system (T+0) for dealing in securities on the Exchange. T+0 system (same day) permits the selling of securities at the same trading session where they are purchased. The system will be applicable in accordance with the liquidity standards governing securities, through a number of regulations organizing the works of brokerage companies dealing under this system. It is noteworthy that the CMA agreed to license the Arab African International Bank to practise margin trading, a major instrument for activation of trading and attraction of more investment flows to the market.

Moreover, the Egyptian Stock Exchange issued a decision to amend one of the

requirements for companies’ listing in CASE 30. By virtue of this amendment, the minimum free float limit for a company’s shares increased from 10% to 15% as a prerequisite for enlisting the company under CASE 30. This action is meant to encourage companies to float a higher percentage of their shares on the Exchange.

- 29 -

According to the statistics of the Capital Market Authority, indicators of overall dealing during July-Sept., 2005/2006 moved up in comparison to the corresponding period. The number of transactions increased from 436 thousand in the comparison period to 1.0 million in the reporting period, and the volume of the dealt-in securities from 525 million, to 1.2 billion. Also, their trading value increased from LE 9.9 billion to LE 42.5 billion.

Trading on the Stock Exchange reflected a growing trend towards bonds;

however, shares still accounted for the bulk of 96.0% of total dealings, against 99.9% during the corresponding period.

Indicators of Overall Trading on the Stock Exchange

No. of

Transactions (Units)

Amount of Dealt-in Securities

(000s)

Value of Dealt-in Securities

(LE mn)

July/September 2005/2006 Total 1041452 1221881 42458

Shares 1041299 1220357 40747 Bonds 153 1524 1711 July/September 2004/2005 Total 436352 524897 9921 Shares 436300 524863 9917 Bonds 52 34 4

- 30 -

2/1: Shares Market 2/1/1: Primary (Issue) Market

a) New Issues

During July-Sept., 2005/2006, the new issues approved by the CMA

increased to 549 in number. Of these issues, 301 went to new incorporations, with the volume of shares reaching 37 million at a value of LE 1.0 billion or 9.2% of the total value of issues. Issues to increase the capital of existing companies reached 248, with the number of shares reaching 714 million at a value of LE 10.0 billion or 90.8% of the total.

New Share Issues on the Stock Exchange

July/September

2004/2005 2005/2006 Total Number of Issues (Unit) 503 549 New Incorporations 293 301 Capital Increase of Existing Companies 210 248 Total Number of Shares (mn) 254 751 New Incorporations 69 37 Capital Increase of Existing Companies 185 714 Total Value of Shares (LE mn) 6180 11038 New Incorporations 1994 1010 Capital Increase of Existing Companies 4186 10028 Source: CMA (Information Center)

- 31 -

b) Companies Listed on the Stock Exchange

The process of listing and delisting of companies on the Stock Exchange

resulted in the decrease of the number of listed companies to 765 at end of Sept. 2005, against 770 companies at end of June 2005. Moreover, the nominal value of the capital of listed companies dropped to LE 106.4 billion, against LE 108.2 billion, while their market value rose to LE 388.1 billion, against LE 337.1 billion.

Companies Listed on the Stock Exchange (LE mn)

June 2005 Sept. 2005 No. of

Companies (Unit)

Nominal Value

Market Value

No. of Companies

(Unit)

Nominal Value

Market Value

Total 770 108209 337059 765 106446 388050 On official schedules 132 49274 250136 138 52100 304977 On unofficial schedules 612 57368 84407 602 53077 81623 On the transitional schedule 26 1567 2516 25 1269 1450

Source: Cairo and Alex. Stock Exchanges (CASE) The sectoral distribution of the market capital (LE 388.1 billion at end of

Sept. 2005) indicates that the sectors of communications; and building and construction materials attracted most of the investments, accounting for 31.5% and 26.3%, respectively, of the total market capital. The sector of finance, insurance and real estates came next at 11.7%, followed by natural gas and mining (7.9%) and the manufacturing sector (6.3%).

- 32 -

Market Capital by Sector

(LE mn) End of June 2005 % Sept. 2005 %

Total 337059 100.0 388050 100.0Agriculture and Fishing 1370 0.4 1366 0.3Building and Construction Materials 78961 23.4 102037 26.3Natural Gas & Mining 21886 6.5 30604 7.9Manufacturing 22640 6.7 24399 6.3Trade 2350 0.7 2357 0.6Finance, Insurance & Real Estates 39287 11.6 45433 11.7Utilities 7008 2.1 4144 1.1Communications 120541 35.8 122166 31.5Others 43015 12.8 55544 14.3

Source: CASE

2/1/2: Secondary (Trading) Market

Share trading was bullish during the period. The total volume of dealing in LE and US dollar shares (on the floor and over the counter) jumped to LE 40.7 billion worth during July/Sept. 2005/2006, well above the level of the comparison period (LE 9.9 billion).

Dealings were mainly on the floor (in LE and US dollar) as their value reached LE 38.1 billion worth or 93.6% of the total dealing (on the floor and over the counter) during July/Sept., 2005/2006.

Dealings in LE shares accounted for 87.2% of the total dealing -in value

terms- on the floor, whereas US dollar shares represented only 12.8%. Trading was concentrated in the manufacturing sector (in terms of the three indicators, i.e., the number of transactions and the volume and value of shares) in both LE and US dollar. The finance, insurance and real estates sector came second, followed by services, transportation, communications, electricity, natural gas and health.

- 33 -

The volume of dealing in LE shares over the counter (OTC) registered LE

1.9 billion or 73.8% of the total OTC dealings.

The share price index was affected by the market boom in July/Sept. 2005/2006, as the CMA index denoted a rise of 13.2%, recording 1996.5 points at end of Sept. 2005, against 1763.4 points at end of June 2005.

The CASE 30 for the 30 most active companies in terms of activity and

liquidity recorded a remarkable increase of 13.4%, posting 5476.8 points at end of Sept. 2005, against 4828.7 points at end of June 2005.

Index number of share prices by sector

0

500

1000

1500

2000

2500

3000

Agriculture Mining Construction Manufacturing Transportation Trade Finance &Insurance

Services

June-05

Sept-05

400900

1400190024002900340039004400490054005900

June 04 Sep. 04 Dec. 04 March 05 June 05 Sep. 05

CASE 30 CMAI

The Two Indices of Share Trading on The Stock Exchange

- 34 -

2/2: Bonds Market

2/2/1: Primary (Issue) Market

The nominal value of issued bonds (listed or unlisted) increased by LE 7.8

billion during the reporting period, reaching LE 43.1 billion at end of September 2005. This increase was basically attributed to the pickup of treasury bonds – dealt-in under the primary dealers system – by LE 8.0 billion and of corporate bonds by LE 1.1 billion. The period witnessed the amortization of treasury bonds and US dollar development bonds in the amount of LE 1.0 billion and LE 0.3 billion, respectively.

Bonds Listed on the Stock Exchange

(LE mn) June 2005 September 2005 End of

Value % Value % Total 35313.1 100.0 43095.6 100.0 Government Bonds 28547.3 80.8 35264.4 81.8 - Treasury bonds 13000.0 36.8 12000.0 27.8 - Treasury bonds (primary dealers system) 14000.0 39.6 22000.0 51.0 - Housing bonds 123.6 0.4 123.6 0.3

- - US dollar development bonds 1423.7 4.0 1140.8 2.7 Corporate Bonds 5114.7 14.5 6180.1 14.4 Bank Bonds 1651.1 4.7 1651.1 3.8 Source: CASE

As for the relative structure of the issued bonds at end of Sept. 2005, government bonds accounted for 81.8% of the total, followed by corporate bonds (14.4%) and bank bonds (3.8%).

- 35 -

2/2/2: Secondary (Trading) Market

The three indicators of transactions on bonds (the number of transactions,

and the volume and value of dealt-in securities) - mainly on the floor- increased. Trading volume (on the floor and over the counter) reached 1.5 million papers, with a value of LE 1.7 billion, through 153 transactions during the reporting period.

Trading in Listed Bonds on the Floor

July /September

During 2004/2005 2005/2006

No. of

Transactions

Quantity

(000’s)

Value

(mn)

No. of

Transactions

Quantity

(000’s)

Value

(mn) Total Bonds (LE) 51 34.4 3.6 142 1516.7 1687.3Treasury bonds 6 0.2 0.3 8 45.8 48.6 Treasury bonds (primary dealers system)

-

-

-

108

1456.2

1637.2 Housing bonds 37 14.5 1.2 21 2.6 0.2 Corporate bonds 4 19.6 2.0 5 12.1 1.3 Bank bonds 4 0.1 0.1 - - - Total Bonds (US Dollar)

1

0.0

0.0

1

0.8

0.1

Development bonds 1 0 0.0 0 0 0.0

Corporate bonds 0 0 0.0 1 0.8 0.1

Source: CMA

- 36 -

Trading on the floor (97%) was mainly in treasury bonds (under the

primary dealers system), where the trading volume registered 1.5 million bonds at a value of LE 1.6 billion through 108 transactions.

Over the counter, the dealing was conducted in the dollar bonds of a single

company, with a total value of US$ 4 million through 10 transactions.

2/3: Transactions of Foreign Investors on the Egyptian Exchange

The recovery of the stock market attracted more foreign investors (purchases and sales). As such, the total value of LE and US dollar transactions augmented by LE 16.3 billion worth during July/Sept., 2005/2006, compared with the comparison period, thereby reaching LE 21.6 billion worth (against LE 5.3 billion). Net transactions of foreign investors (purchases and sales) unfolded net sales of LE 1.2 billion worth during the period against net purchases of LE 0.2 billion during the preceding corresponding period.

Transactions of Foreign Investors on the Stock Exchange

July/September

2004/2005 2005/2006

During

Egyptian Pound US Dollar Egyptian

Pound US Dollar No. of Transactions (Unit) 87364 380 212992 2497 Purchases 46371 218 118770 1181 Sales 40993 162 94222 1316 No. of Dealt-in Securities (mn)

137 2 305 28

Purchases 72 1 153 13 Sales 65 1 152 15

Value of Dealt-in Securities (mn)

5237.0 6.5 19839.5 298.3

Purchases 2724.4 0.9 10023.6 29.4

Sales 2512.6 5.6 9815.9 268.9

Source: CMA (Information Center)

- 37 -

Transactions of foreign investors on LE securities reached LE 19.8 billion or 92.0% of total transactions (against only LE 5.2 billion during the corresponding period of the previous FY). These transactions resulted in net purchases of LE 0.2 billion during the period. Foreign investors’ transactions in US dollar represented only 8.0% of the total, reaching US$ 0.3 billion and resulting in net sales of US$ 0.2 billion (against net sales of US$ 4.7 million during the corresponding period.

2/4: Mutual Funds

The period witnessed the launching of 2 mutual funds, thus bringing their total number to 25 at end of September 2005 (23 open-end funds and 2 close-end ones). Concurrently, the nominal value of mutual fund certificates increased to LE 5.6 billion, while their market value reached LE 10.3 billion, at end of September 2005, against LE 8.4 billion at end of June 2005, denoting a rise of 22.6%.

Concerning the Egyptian mutual funds abroad, issuing their certificates in

US$, their capital at the time of incorporation reached about US$ 509.3 million.

- 38 -

3- Public Finance and Domestic Public Debt 3/1: Consolidated Fiscal Operations of the General Government

In early FY 2005/2006, the consolidated fiscal operations of the general

government were re-classified in line with the IMF’s Government Finance Statistics “GFS” 2001. The purpose of such reclassification was to standardize the concepts of fiscal operations and present them precisely and transparently. Within this context, data were compiled on a cash basis. Estimates of the consolidated fiscal operations of the general government for 2005/2006 were made according to the fiscal program planned for the implementation of the fourth year of the Five-year Economic Development Plan (2002-2007). Preparation of such estimates was guided by a fiscal policy whose main objectives were rationalizing government expenditure, cushioning low-income brackets, and raising employees’ efficiency. This policy aimed also to improve the quality of government services and create more job opportunities. On the side of public revenues, financial resources were expected to increase as a result of the measures taken during the previous FY to reform taxes and customs, in addition to expand the taxpayer base.

The July/September period of FY 2005/2006 witnessed, in particular, a

number of fiscal measures, including tax exemption of the returns earned by legal persons from securities, CBE certificates of deposits (CDs) and related transactions. A center for large taxpayers was also established at the Ministry of Finance to streamline the procedures of dealing with tax administrations. Moreover, the Executive Regulations of the State Budget Law were amended to be consistent with the above-said reclassification.

Hereunder are the estimates of the consolidated fiscal operations of the

general government for FY 2005/2006 and a comparative follow up of their execution during the first quarter of the said fiscal year.

- 39 -

3/1/1: Estimates of the Consolidated Fiscal Operations of the General Government

State Budget Sector

Total revenues of the state budget sector for FY 2005/2006 are projected at

LE 130.1 billion (22.0% of GDP), of which tax revenues are LE 81.6 billion or 62.7% of the total. Taxes on income and profits are estimated at LE 34.8 billion or 42.7% of total tax revenues, and on goods and services LE 32.4 billion or 39.7%. The rise in tax revenues is due to the favorable impact of the measures taken to facilitate dealing with tax administrations and to develop the working systems therein. In addition, customs duties are projected to stand at LE 9.1 billion or 11.2%, while the other revenues are estimated at LE 45.6 billion or 35.1% of total projected revenues.

Expenditures are projected to register LE 187.8 billion (31.7% of GDP).

Compensation of employees is estimated at LE 45.9 billion or 24.4% of total expenditures, while interests are expected to post LE 42.6 billion or 22.7% of the total. Subsidies to GASC are estimated at LE 9.7 billion or 5.2% of total expenditures and 1.6% of GDP (against LE 11.2 billion or 6.9% of total expenditures and 2.1% of GDP during the previous FY). Moreover, subsidies to petroleum are projected at LE 22.1 billion and grants and social benefits at LE 14.2 billion.

Purchases of non-financial assets (investments) within the economic and

social development plan are budgeted at LE 17.4 billion or 9.3% of total expenditures of FY 2005/2006.

Accordingly, the budget sector’s cash deficit is estimated at LE 57.7 billion

or 9.7% of GDP. Adding this deficit to the estimated net acquisition of financial assets, the overall fiscal deficit is estimated at about LE 59.4 billion or 10.0% of GDP during FY 2005/2006.

- 40 - State Budget Sector and National Investment Bank (NIB)

When adding the fiscal operations of the NIB, the estimated cash deficit of

the budget sector and the NIB will fall to LE 38.1 billion. However, “cash deficit plus net acquisition of the financial assets” will raise the overall deficit projected for this sector to about LE 49.2 billion or 8.3% of GDP.

State Budget Sector, NIB and SIFs

With the addition of the fiscal operations of the SIFs to those of the state budget sector and NIB, the cash deficit will decrease to some LE 36.7 billion or 6.2% of GDP. However, “cash deficit plus net acquisition of the financial assets” will raise the overall deficit projected for this sector to about LE 49.3 billion or 8.3% of GDP. Borrowing from the banking system (71.5%), net privatization proceeds (6.1%), foreign borrowing (6.1%) and other entities (16.3%) will provide the finance necessary for this deficit. As shown from the said figures, borrowing from the banking system and foreign borrowing showed higher relative weight compared with the previous FY.

- 41 -

Estimates of Consolidated Fiscal Operations of General Government (Budget Sector, NIB and SIFs)

(Total Revenues) (LE bn)

2005/2006

Budget Sector

Relative Structure

Budget Sector and

NIB

Relative Structure

Budget Sector, NIB& SIFs

Relative Structure

Total Revenues 130.1 100.0 134.5 100.0 155.4 100.0-Taxes 81.6 62.7 81.6 60.7 81.6 52.5• Taxes on income and profits 34.8 26.7 34.8 25. 9 34.8 22.4

* From EGPC 12.5 9.6 12.5 9.3 12.5 8.1 * From SCA. 7.5 5.7 7.5 5.5 7.5 4.8 * From CBE 0.1 0.1 0.1 0.1 0.1 0.1 * From other units 6.3 4.8 6.3 4.7 6.3 4.0 * Payable by individuals 8.4 6.5 8.4 6.3 8.4 5.4• Taxes on property 1.0 0.8 1.0 0.7 1.0 0.6• Taxes on goods and services 32.4 24.9 32.4 24.1 32.4 20.8• Taxes on international trade

(customs)

9.1 7.0

9.1

6.8

9.1

5.9

• Other taxes 4.3 3.3 4.3 3.2 4.3 2.8 - Grants 2.9 2.2 2.9 2.1 2.9 1.9 - Other revenues 45.6 35.1 50.0 37.2 70.9 45.6• Property income* 37.9 29.1 42.2 31.4 44.0 28.3• Sales of goods and

services 5.1 3.9 5.1 3.8 5.1 3.3Financing investment 1.0 0.8 1.0 0.7 1.0 0.6• Others 1.6 1.3 1.7 1.3 20.8 13.4

Source: Ministry of Finance Percentages are calculated in terms of LE million. *Includes the property incomes of the EGPC, SCA, CBE, some economic institutions and other

companies.

- 42 -

Estimates of Consolidated Fiscal Operations of General Government

(Budget Sector, NIB and SIFs) (Total Expenditures)

(LE bn) 2005/2006

Budget Sector

Relative Structure

Budget Sector

and NIB

Relative Structure

Budget Sector,

NIB and SIFs

Relative Structure

Total Expenditures 187.8 100.0 172.6 100.0

192.1 100.0Compensation of Employees

45.9 24.4 45.9 26.6

46.4

24.1

Purchases of Goods and Services

13.1 7.0 13.2 7.6

13.2 6.9

Interests 42.6 22.7 38.3 22.2 38.3 20.0 Subsidies, Grants and Social Benefits 50.5 26.9 39.5 22.9

58.4 30.4

Subsidies 35.4 18.8 35.4 20.5 35.4 18.4 Grants 1.8 1.0 1.8 1.0 1.8 1.0 Social benefits 12.3 6.6 1.3 0.8 20.2 10.5 Others 1.0 0.5 1.0 0.6 1.0 0.5 Other Expenditures 18.3 9.7 18.3 10.6

18.3 9.5

Purchases of Non-financial Assets (Investments 17.4 9.3 17.4 10.1

17.5 9.1Source: Ministry of Finance Percentages are calculated in terms of LE million.

- 43 -

Estimates of Consolidated Fiscal Operations of General Government

(Budget Sector, NIB and SIFs) (Cash and Overall Deficit/Surplus and Financing Sources)

(LE bn) 2005/2006

Budget Sector

Relative Structure

Budget Sector and

NIB

Relative Structure

Budget Sector, NIB

and SIFs

Relative Structure

Total Revenues 130.1 134.5 155.4 Total Expenditures 187.8

172.6

192.1

Cash Deficit 57.7 38.1 36.7 Net acquisition of financial assets

1.7

11.1

12.6

Overall Deficit 59.4 49.2 49.3

Financing Sources

59.4

100.0

49.2

100.0

49.3

100.0

Domestic financing

61.4

103.3

64.1

130.4

64.6

131.1

Banking

34.3

57.8

34.7

70.6

35.2

71.5

Non-banking

27.1

45.5

29.4

59.8

29.4

59.6 Foreign borrowing 3.0 5.0 3.0 6.1 3.0 6.1 Arrears - - - - - - Others -1.2 -2.0 -1.2 -2.4 -10.3 -20.9 Financing effects for eliminations

-

-

-12.9

-26.4

-4.2

-8.6

Exchange rate revaluation

-

-

-

-

-

-

Net privatization proceeds

3.0

5.1

3.0

6.1

3.0

6.1

Privatization proceeds

5.0

8.4

5.0

10.2

5.0

10.2

Treasury contribution to the Restructuring Fund

2.0

3.3

2.0

4.1

2.0

4.1 Discrepancy -6.8 -11.4 -6.8 -13.8 -6.8 -13.8 Source: Ministry of Finance Percentages are calculated in terms of LE million.

- 44 -

3/1/2: Follow-up of the Execution of the Consolidated Fiscal Operations of the General Government during July-Sept. 2005/2006

State Budget Sector

According to the Ministry of Finance, execution of the consolidated fiscal operations of the budget sector during July-Sept. of FY 2005/2006 reveals that total collected revenues reached some LE 24.6 billion or 18.9% of the total projected for the whole FY.

Tax revenues reached about LE 13.4 billion, representing 54.6% of total

revenues during July/Sept., 2005/2006, and 16.5% of the total estimated for the whole FY. Collected taxes on goods and services amounted to some LE 6.4 billion or 47.8% of total tax revenues. Taxes on individuals' incomes and profits reached some LE 4.5 billion or 33.3% of the total. Customs duties contributed about LE 1.9 billion or 14.4% of the total.

Other revenues reached some LE 11.3 billion, mostly from property income

that recorded LE 10.0 billion, of which the EGPC contributed LE 6.9 billion and the Suez Canal Authority LE 2.6 billion.

As for expenditures, they amounted to about LE 32.3 billion during the period, or 17.2% of the total estimated for the whole FY. Compensation of employees reached some LE 12.4 billion or 38.3% of total expenditures. Interest payments on public debt (foreign and domestic) reached about LE 5.9 billion or 18.2% of total expenditures, while defense and some other expenditures posted about LE 4.3 billion or 13.4%, social benefits about LE 3.0 billion and subsidies to GASC some LE 1.9 billion or 5.9% of the total.

- 45 - Execution of the said budget sector operations during July/Sept., 2005/2006 unfolded a cash deficit of LE 7.7 billon or 13.4% of the deficit projected for the whole FY. Net acquisition of financial assets amounted to some LE 0.4 billion. Thus, the overall deficit registered LE 8.1 billion during the period or 13.7% of the projected figure for the whole FY.

Budget Sector and NIB

With the addition of the fiscal operations of the NIB to the budget sector

during July-Sept., 2005/2006, the cash deficit decreased to LE 4.7 billion. With this deficit being added to net acquisition of financial assets (LE 2.8 billion) the overall deficit amounted to some LE 7.5 billion during that period.

Budget Sector, NIB and SIFs

With the addition of the fiscal operations of SIFs to those of the budget sector and NIB, the cash deficit of the consolidated fiscal operations of the general government rose to about LE 7.9 billion during the period. Taking into consideration net acquisition of financial assets which reached some LE 5.5 billion, the overall deficit widened to about LE 13.4 billion or 27.2% of the estimated deficit.

- 46 -

Execution of Consolidated Fiscal Operations of General Government

(Budget Sector, NIB and SIFs) (Total Revenues)

(LE bn)

July/Sept., 2005/2006

Budget Sector

Relative Structure

Execution Ratio

to Total Estimate

for the Year

Budget Sector

and NIB

Relative Structure

Execution Ratio to

Total Estimate for the Year

Budget Sector,

NIB and SIFs

Relative Structure

Execution Ratio to

Total Estimate for

the Year

Total Revenues 24.6 100.0 18.9 25.2 100.0 18.8 29.6 100.0 19.0 Tax Revenues 13.4 54.6 16.5 13.4 53.3 16.5 13.5 45.4 16.5 Tax on income

& profits

4.5 18.2 12.8 4.5 17.7 12.8 4.5 15.1 12.8 From EGPC - 0.0 0.0 - 0.0 0.0 - 0.0 0.0 From SCA 1.5 6.0 19.8 1.5 5.8 19.8 1.5 5.0 19.8 From CBE - 0.0 0.0 - 0.0 0.0 - 0.0 0.0 From other units 1.0 4.1 16.1 1.0 4.0 16.1 1.0 3.4 16.1 Payable by individuals 2.0 8.1 23.6 2.0 7.9 23.6 2.0 6.7 23.6

Taxes on property 0.2 0.6 16.3 0.2 0.7 16.3 0.2 0.6 16.3

Taxes on goods and services 6.4 26.1 19.9 6.4 25.5 19.9 6.4 21.7 19.9

Taxes on international trade (customs) 1.9 7.9 21.3 1.9 7.7 21.3 2.0 6.5 21.3 Other taxes 0.4 1.8 10.2 0.4 1.7 10.2 0.4 1.5 10.2Grants -0.1 -0.3 -2.9 -0.1 -0.3 -2.9 -0.1 -0.3 -2.9Other Revenues 11.3 45.7 24.7 11.9 47.0 23.7 16.2 54.9 22.9 Property income 10.0 40.7 26.4 10.6 42.0 25.1 10.9 37.0 24.9 Sales of goods and services 0.8 3.2 15.2 0.8 3.1 15.2 0.8 2.6 15.2 Financing investment 0.1 0.5 13.4 0.1 0.5 13.4 0.1 0.5 13.4 Others 0.4 1.3 20.0 0.4 1.4 20.7 4.4 14.8 21.0

Source: Ministry of Finance Percentages are calculated in terms of LE million.

- 47-


(Budget Sector, NIB and SIFs) (Total Expenditures)

(LE bn) July / Sept., 2005/2006

Budget Sector

Relative Structure

Execution Ratio to Total Estimate for

the Year

Budget Sector

and NIB

Relative

Structure

Execution Ratio to Total Estimate for

the Year

Budget Sector, NIB

and SIFs

Relative Structure

Execution Ratio to

Total Estimate for

the Year

Total Expenditures

32.3

100.0

17.2

29.9

100.0

17.3

37.5

100.0

19.5

Compensation of Employees 12.4 38.3 27.1 12.4 41.5 27.1 12.5 33.3 27.0 Purchases of Goods and Services 1.9 6.0 14.8 1.9 6.5 14.8 1.9 5.2 14.7

Interest 5.9 18.2 13.8 6.2 20.8 16.2 6.2 16.6 16.2

Subsidies, Grants and Social Benefits 5.8 18.0 11.5 3.0 10.1 7.7 10.6 28.1 18.1

Subsidies 2.5 7.7 7.1 2.5 8.3 7.0 2.5 6.6 7.0 Grants 0.3 1.0 17.1 0.3 1.0 17.1 0.3 0.8 17.1 Social benefits 3.0 9.3 24.4 0.2 0.8 18.5 7.8 20.7 38.5 Others - - - - - - - - -

Other Expenditures, Including Defense

4.3

13.4

23.8

4.4

14.6

23.8

4.3

11.6

23.8 Purchases of Non-financial Assets (Investments)

2.0

6.1

11.3

2.0

6.5

11.3

2.0

5.2

11.2

Source: Ministry of Finance. Percentages are calculated in terms of LE million.

- 48 -


(Budget Sector, NIB and SIFs) (Cash and Overall Deficit / Surplus and Financing Sources)

(LE bn)

July / Sept., 2005/2006

Budget Sector

Relative Structure

Execution Ratio to

Total Estimate for

the Year

Budget Sector

and NIB

Relative

Structure

Execution Ratio to

Total Estimate for

the Year

Budget Sector,

NIB and SIFs

Relative Structure

Execution Ratio to

Total Estimate for the Year

Total Revenues 24.6 18.9 25.2 18.8 29.6 19.0 Total Expenditures 32.3 17.2 29.9 17.3 37.5 19.5

Cash Deficit 7.7 13.4 4.7 12.3 7.9 21.6 Net acquisition of financial assets 0.4 21.0 2.8 25.4 5.5 43.6

Overall Deficit 8.1 13.7 7.5 15.2 13.4 27.2 Financing Sources 8.1 100.0 13.7 7.5 100.0 15.2 13.4 100.0 27.2 Domestic financing 5.9 73.1 9.7 6.6 88.3 10.3 8.1 60.3 12.5

Banking -7.0 -86.6 -20.5 -5.9 -78.7 -17.0 -4.4 -32.9 -12.5 Non-banking 12.9 159.7 47.9 12.5 167.0 42.6 12.5 93.2 42.6

Foreign borrowing 4.9 59.7 161.4 4.9 64.6 161.4 4.9 36.5 161.4 Arrears - - - - - - - - - Others 0.0 -0.3 2.2 0.0 -0.3 2.2 0.0 -0.2 0.3 Financing effects for eliminations - - - -2.3 -31.2 18.0 2.1 15.8 -49.9 Exchange rate revaluation

-0.3

-3.4

-

-0.3

-3.7

-

-0.3

-2.1

-

Net privatization proceeds

0.8

10.4

28.2

0.8

11.3

28.2

0.8

6.3

28.2

Privatization proceeds

1.0

12.5

20.3

1.0

13.6

20.3

1.0

7.6

20.3

Treasury contribution to the Restructuring Fund

0.2

2.1

8.6

0.2

2.3

8.6

0.2

1.3

8.6

Discrepancy -3.2 -39.5 47.3 -2.2 -29.0 32.1 -2.2 -16.2 32.1

Source: Ministry of Finance Percentages are calculated in terms of LE million.

It is worth mentioning that the bulk of the deficit was financed by non-banking domestic financing sources.

- 49-

3/2: Domestic Public Debt

3/2: Domestic Public Debt

Domestic public debt stepped up by LE 10.7 billion during July/Sept., 2005/2006 to LE 521.5 billion at end of September 2005. Of this amount, domestic government debt accounted for 68.1%, debt of public economic authorities 9.9%, and net debt of NIB 22.0% at end of September 2005.

Total Domestic Public Debt

(LE bn) June 2005 Sept. 2005 At End of Value % Value %

Change + (-)

Domestic Public Debt (1+2+3) 510.8 100.0 521.5 100.0 10.71. Due on the government 349.2 68.4 355.1 68.1 5.92. Due on public economic

authorities 47.2 9.2 51.5 9.9 4.33. Due on NIB (net) 114. 4 22.4 114.9 22.0 0.5

3/2/1: Domestic Government Debt

Domestic government debt totaled LE 355.1 billion, increasing by LE 5.9

billion or 1.7% during July-Sept., 2005/2006. The increase was an outcome of the retreat of about LE 21.0 billion in the government net credit position with the banking system and the drop of LE 14.9 billion in the balance of treasury bills and bonds and of LE 0.2 billion in the government debt to the NIB. The retreat in the government net credit position with the banking system was due to the decline in the deposits counterpart to treasury bills, as a portion of them fell due and another portion was subject to early redemption.

- 50 -

Domestic Government Debt (LE bn) Change Sept. 2005 June 2005

+(-) % Value % Value Balances at End of

5.9 100.0 355.1 100.0 349.2 Domestic Government Debt

-14.9 91.8 326.0 97.6 340.9 -Balances of Notes, Bonds and Bills

7.0 62.8 223.0 61.8 216.0 • Notes and bonds*

7.0

11.1 39.3 9.2 32.3

Of which: tradable on exchanges

-21.9 29.0 103.0 35.8 124.9 • Treasury bills -0.2 40.4 143.5 41.2 143.7 - Government

Borrowing from the NIB

21.0 -32.2 -114.4 -38.8 -135.4 - Net Balances of Government Accounts at the Banking System

-5.2 3.5 12.7 5.1 17.9 • Facilities 26.2 -35.7 -127.1 -43.9 -153.3 • Deposits

59.9% 65.1%

Domestic Government Debt/GDP Source: Ministry of Finance, CBE and NIB Ratios are calculated in terms of LE million. * Including treasury bonds; housing bonds; bonds denominated in foreign currencies with public

commercial banks; the 5% ratio retained from profits of corporations subject to Law No. 97 of 1983 for purchasing government bonds; and US dollar denominated sovereign bonds tradable on world exchanges and held with financial institutions resident in Egypt (banking system and insurance sector).

The decline in the balance of notes, bonds and bills was attributed to the following:

- Outstanding TB balance decreased by LE 21.9 billion to LE 103.0 billion at end of September 2005. The following developments were behind this decrease:

- 51 -

• TB balance issued, according to the agreement between the Central Bank and the Ministry of Finance, in favor of the Central Bank for monetary policy purposes, dropped by LE 33.1 billion. This drop was due to the redemption of TBs in the amount of LE 15 billion and the early redemption of some LE 18.1 billion. Thus, the TB balance stood at LE 11.9 billion at end of September 2005.

• TB balance issued under the primary dealers system increased by LE 11.2 billion, to reach LE 91.1 billion at end of September 2005.

- Bonds balance picked up by LE 7.0 billion, due to the issue of four tranches of treasury bonds under the primary dealers system at a value of LE 8.0 billion (LE 2.0 billion each). Moreover, the third and fourth tranches of treasury bonds -issued in the amount of LE one billion under Law No. 4 for 1995- were redeemed. As a result, the balance of these bonds rose to some LE 34.0 billion at end of September 2005.

- 52 -

Government Domestic Debt

-200

-150

-100

-50

0

50

100

150

200

250

Borrowing from the N.I.B. Bonds Treasury Bills Net Balance with the Banking System

June2005 Sep. .2005

LE bn

- 52 - 3/2/2: Debts of Public Economic Authorities

Debts of the public economic authorities rose by LE 4.3 billion during July-

Sept. of FY 2005/2006, reaching LE 51.5 billion. The rise was an outcome of larger borrowing of LE 1.5 billion from the NIB, coupled with a retreat of LE 2.8 billion in their net credit position at the banking system.

Debts of Public Economic Authorities (LE bn)

June 2005 Sept. 2005 Change Balances at End of Value % Value % +(-) Total Debt 47.2 100.0 51.5 100.0 4.3 - Net balances of the

economic authorities at the banking system -11.1 -23.5

-8.3 -16.1 2.8 Facilities 23.4 49.7 24.0 46.7 0.6 Deposits -34.5 -73.2 -32.3 -62.8 2.2

- Borrowings of the economic authorities from the NIB 58.3 123.5

59.8 116.1 1.5 Total debt/GDP 8.8% 8.7%

Source: Ibid.

3/2/3: Resources and Uses of the NIB

NIB net resources augmented by LE 1.8 billion during July/Sept.,

2005/2006, to reach LE 318.2 billion at end of September 2005. This increase came primarily as a result of the retreat in the credit position of the Bank with the banking system by LE 1.4 billion, and the rise in post office saving accounts by LE 0.4 billion.

- 53 -

Resources and Uses of the NIB

(LE bn) June 2005 September 2005 Balances at End of Value % Value %

Change +(-)

Resources 316.4 100.0 318.2 100.0 1.8 • Social Insurance

Fund for Civil Servants 122.9

38.8 123.1 38.7 0.2 • Social Insurance

Fund for Business Sector Employees (Public and Private) 96.1

30.4 96.1 30.2 0.0 • Investment

certificate proceeds 58.5

18.5 58.5 18.4 0.0 • Accumulated interest

on investment certificates (group A) 6.8

2.2 7.0 2.2 0.2 • US dollar

development bonds 1.4

0.4 1.1 0.3 -0.3 • Post office saving

accounts 33.9

10.7 34.3 10.8 0.4 • NIB's account

balances at the banking system (net) -4.9

-1.5 -3.5 -1.1 1.4 • Others 1.7 0.5 1.6 0.5 -0.1 Uses 316.4 100.0 318.2 100.0 1.8 • Government 143.7 45.4 143.5 45.1 -0.2 • Economic authorities 58.3 18.4 59.8 18.8 1.5 • Others 114.4 36.2 114.9 36.1 0.5 Debt of the NIB (Net)/ GDP % 21.3% 19.3% Source: Ibid.

The NIB used LE 143.5 billion of its total resources to finance government investments and LE 59.8 billion to finance investments of the public economic authorities. The rest (LE 114.9 billion) was channeled to financing its various activities, i.e., concessional lending and contributions to various projects.

- 54 -

4- External Transactions

4/1: Foreign Exchange Market

The FX market resources reached US$ 6.7 billion during July/Sept., 2005/2006, with a rise of US$ 3.6 billion compared with the corresponding period of the previous FY. Utilizations amounted to US$ 5.9 billion, up by US$ 3.0 billion. As a result, a surplus of US$ 0.8 billion was realized during the period under review, against US$ 0.2 billion in the period of comparison. The surplus on the FX market transactions was attributed to a surplus of US$ 0.7 billion in the banking system and of US$ 0.1 billion in exchange dealer companies.

Resources and Utilizations of the

Foreign Exchange Market (US$ mn)

July-September 2004/2005 2005/2006Surplus/Deficit (-) 228 824 The banking system 197 727 Exchange dealer companies 31 97 Resources 3108 6694 The banking system 2918 6086 Exchange dealer companies 190 608 Utilizations 2880 5870 The banking system 2721 5359 Exchange dealer companies 159 511

Banks' net foreign currency assets registered US$ 3.8 billion at end of

September 2005, down by US$ 0.4 billion during the period. Consequently, the ratio of banks' assets to their liabilities in foreign currencies declined to 112.2% at end of September 2005 from 113.8% at end of June 2005.

As a result, the CBE managed to augment its foreign currency reserves. Its net international reserves increased by US$ 1.8 billion during the period, reaching US$ 21.1 billion at end of September 2005, against US$ 19.3 billion at end of June 2005. Net international reserves remained on the rise (at the time of printing this Review) to reach US$ 22.8 billion at end of April 2006.

- 55 -

A follow-up of exchange rate developments during the period shows that the Egyptian pound continued to appreciate against the US dollar, rising by 0.5%. Thus, the average US$ exchange rate (buy) amounted to pt 575.2 at end of September 2005, against pt 577.9 at end of June 2005.

Average Exchange Rate of the US Dollar in the Foreign Exchange Market

(pt/dollar) End of Month Average Rate September 2004 623.2 October 623.4 November 622.5 December 614.5 January 2005 582.0 February 579.0 March 578.8 April 578.6 May 578.8 June 577.9 July 576.4 August 576.2 September 575.2

Source: The CBE Forex Statistics Chamber.

As to exchange dealer companies, their number reached 100, with 147 branches at end of September 2005. Moreover, the surplus of their dealings mounted to US$ 97 million (against US$ 31 million in the corresponding period of the previous FY). This rise was attributed to a US$ 0.4 billion pickup in their resources, to reach US$ 0.6 billion or 9.1% of total market resources. Moreover, their utilizations rose by US$ 0.4 billion, posting US$ 0.5 billion or 8.7% of total market utilizations.

- 56 -

4/2: Balance of Payments∗

4/2/1: Summary

Transactions with the external sector during July/Sept., 2005/2006 unfolded an overall surplus of US$ 1.8 billion against an overall deficit of US$ 0.1 billion in the corresponding period of the previous FY. Therefore, CBE foreign currency reserve assets increased by an amount equivalent to the said surplus. The capital and financial account realized a net inflow of US$ 1.8 billion, against a net outflow of US$ 1.4 billion. On the other hand, the surplus on the current account declined by 78.0% to US$ 326.7 million, against US$ 1.5 billion. Three factors were behind this decline. First, the trade deficit expanded by 41.8%, to reach US$ 3.2 billion, with the rise in merchandise import payments exceeding its counterpart in merchandise export proceeds. Second, the surplus on services fell by 18.5% to US$ 2.2 billion. Third, net unrequited transfers grew by 26.0% to US$ 1.4 billion.

The net inflows achieved by the capital and financial account during the

period was attributed to higher flows of foreign investment in its two types (direct and portfolio). The two types combined recorded a net inflow of US$ 4.5 billion, against US$ 0.8 billion. Specifically, FDI in Egypt recorded a net inflow of US$ 1.9 billion, (including net investments of US$ 419.9 million in the oil sector) against US$ 0.8 billion, (including US$ 524.8 million in the oil sector). Net portfolio investment in Egypt improved, realizing net inflows of US$ 2.6 billion (including foreigners' subscription of about US$ 2.8 billion for Egyptian bonds and notes), against US$ 38.6 million in the corresponding period.

∗ A statistical statement recording economic transactions between a given economy (resident) and the rest of the

world (non-resident) during a specific period, compiled in accordance with the Fifth Edition of the IMF’s Balance of Payments Manual, September 1993

- 57 -

Balance of Payments July/Sept.

(3.5)

(2.5)

(1.5)

(0.5)

0.5

1.5

2.5

TradeBalance

ServicesBalance

Transfers(net)

Capital &Financial

A/C

OverallBalance

2004/2005

2005/2006

US$ bn

Summary of Current Receipts and Payments (US$ mn)

July/September 2004/2005 % 2005/2006 % Change

+(-) Current Receipts 8367.2 100.0 10008.7 100.0 1641.5 Export proceeds* 3109.3 37.1 4031.0 40.3 921.7 Services receipts 4182.1 50.0 4622.7 46.2 440.6 Private transfers (net) 810.8 9.7 1264.7 12.6 453.9 Official transfers (net) 265.0 3.2 90.3 0.9 (174.7) Current Payments 6885.2 100.0 9682.0 100.0 2796.8 Import payments** 5364.7 77.9 7229.2 74.7 1864.5 Services payments 1520.5 22.1 2452.8 25.3 932.3 * Calculated on FOB basis, as their value is calculated at the customs borders of the Egyptian

economy, i.e., excluding the costs of shipment, insurance and freight. They include exports of free zones to the rest of the world

**Calculated on CIF basis, i.e., including the costs of shipment, insurance and freight. They include imports of free zones from the rest of the world

- 58 -

As for the BOP current account, current receipts rose by US$ 1.6 billion, to

US$ 10.0 billion. This was an outcome of the increase in the proceeds of merchandise exports by 29.6%, in services receipts by 10.5% and in private transfers by 56.0%, and the drop in official transfers by 65.9%. On the other hand, current payments stepped up by US$ 2.8 billion, to US$ 9.7 billion, because import payments rose by 34.8% and services payments by 61.3%. Against this background, the indicators of external balance retreated as shown hereunder.

Current Receipts/Payments Coverage Ratio

(%) July/September 2004/2005 2005/2006Merchandise Exports/ Merchandise Imports 58.0 55.8 Invisible Receipts/Invisible Payments 275.0 188.5 Current Receipts (excluding official transfers)/Current Payments 117.7 102.4

Current Receipts/Current Payments 121.5 103.4

- 59 -

Balance of Payments (US$ mn)

July/September 2004/2005 2005/2006*

Current Account 1482.0 326.7 Current Account (Excluding Transfers) 406.2 -1028.3

Trade Balance -2255.4 -3198.2 Exports** 3109.3 4031.0

Oil and products 1219.2 2137.8 Others 1890.1 1893.2

Imports** -5364.7 -7229.2 Oil -539.1 -1152.8 Others -4825.6 -6076.4

Services Balance 2661.6 2169.9 Receipts, of which: 4182.1 4622.7

Transportation, of which: 1006.4 1164.6 Sues Canal dues (774.6) (871.4)

Travel 2111.0 2321.9 Investment income 153.5 387.2

Payments, of which: -1520.5 -2452.8 Transportation -183.6 -269.2 Investment income -354.9 -509.8

Transfers 1075.8 1355.0 Private (net) 810.8 1264.7 Official (net) 265.0 90.3

Capital and Financial Account -1410.8 1809.3 Direct investment in Egypt (net)*** 774.5 1947.0 Direct investment abroad -5.0 -18.6 Portfolio investment in Egypt (net) 38.6 2579.2+ Portfolio investment abroad 72.9 78.5 Other investments (net) -2291.8 -2776.8

Errors and Omissions (Net) -174.3 -324.1 Overall Balance -103.1 1811.9 Change in Reserve Assets, Increase (-)++ 103.1 -1811.9

* Provisional figures ** Including imports and exports of the free zones ***Including FDI in the oil sector. + Including foreigners' subscriptions for Egyptian bonds and notes ++ Increase takes the sign (-), as it appears on the debit side and represents an outflow, whereas

the decrease takes the sign (+), as it appears on the credit side and represents an inflow.

- 60 -

4/2/2: Trade Balance

Merchandise export proceeds rose by US$ 921.7 million or 29.6%, to US$ 4.0 billion during July-Sept., 2005/2006. This rise was because the oil export proceeds increased by 75.3%, to reach US$ 2.1 billion, while non-oil export proceeds remained almost at the same level of US$ 1.9 billion.

Import payments went up by US$ 1.9 billion or 34.8%, to reach US$ 7.2 billion, as a result of the increase in import payments of all commodity groups. However, the group of fuel, mineral oils and products was an exception, as it fell by 12.8%.

Accordingly, the trade deficit rose by 41.8% to US$ 3.2 billion. The ratio of merchandise export proceeds to merchandise import payments declined to 55.8% (against 58.0%).

3.15.4

4.0

7.2

0.0

1.02.0

3.04.0

5.06.0

7.08.0

2004/2005 2005/2006

Merchanise Transactions

July September/

Exports Imports

US$ bn

- 61 -

4/2/2/1: Commodity Distribution of Exports and Imports

A. Exports by Degree of Processing

The structure of merchandise exports during July/Sept., 2005/2006 – compared with the same period of the previous FY – reveals that the export proceeds of oil products mounted by 51.4% to US$ 766.4 million. This rise was due to a 9.4% increase in the volume of exports, and the rise in the average export prices from 348.0 dollars/ton during the period of comparison to 481.4 dollars/ton during the period of review. Export proceeds of crude oil went up by 59.6% to US$ 759.7 million, because of a rise of 12.1% in the volume of crude oil exports, as well as a pickup in export prices from 31.3 dollars/barrel to 44.6 dollars/barrel. Also, the export proceeds of natural gas increased to US$ 386.7 million, against US$ 19.0 million during the same period of the preceding FY. This upturn was attributed to the noticeably strong exports of natural and liquefied gas to Spain, France, the USA and Korea. Export proceeds of bunker and jet fueling increased by 3.2% to US$ 225.0 million.

Non-oil export proceeds slightly edged up by 1.4% to US$ 1.9 billion.

Export earnings of semi-finished goods climbed by US$ 75.1 million or 36.0%, to reach US$ 283.7 million, owing to the increase in the export proceeds of organic and inorganic chemicals, unmixed aluminum, and cast iron and products thereof. On the other hand, a decline was noticed in those of greases and fats, animal and vegetable oils and products; tanned leather; and molasses.

Exports of raw materials increased by US$ 5.6 million or 3.2%, to reach

US$ 130.2 million. This was due to a rise in the exports of maize, cotton and citrus fruits and a decrease in the exports of vegetables, plants, roots and tubers; and medicinal plants.

Export proceeds of finished goods retreated by US$ 125.2 million or 9.5%,

to reach US$ 1.2 billion. This was ascribed to a drop in the exports of most goods of this group, mainly iron and steel, aluminum articles and cement. Meanwhile, the export proceeds of some finished goods went up (mainly air-conditioners, glass and products thereof, and carpets and floor coverings).

- 62 -

Commodity Distribution of Exports by Degree of Processing

(US$ mn) July/September 2004/2005 2005/2006 Value % Value % Change

Total 3109.3 100.0 4031.0 100.0 921.7 1-Fuel, mineral oils and products 1267.1 40.8 2163.7 53.7 896.6 2-Raw materials 124.6 4.0 130.2 3.2 5.6 3-Semi-finished goods 208.6 6.7 283.7 7.0 75.1 4-Finished goods 1316.1 42.3 1190.9 29.6 (125.2) 6-Miscellaneous items, unclassified 192.9 6.2 262.5 6.5 69.6 B. Imports by Degree of Use

Merchandise import payments rose by US$ 1.9 billion or 34.8% to US$ 7.2

billion. This was a result of the increase in the import payments of all commodity groups, except that of fuel, mineral oils and products that fell by 12.8%. Imports of raw materials increased by US$ 585.1 million or 78.6%, to reach US$ 1.3 billion. This pickup was concentrated in crude oil, maize and iron ore. Meanwhile, imports of wheat noticeably retreated (by 47.9%), and the same downward trend was observed in tobacco, cereals, oleaginous fruits, cotton and sesame.

Imports of intermediate goods scaled up by US$ 426.7 million or 24.4%, to

US$ 2.2 billion. 85.7% of this increase was in iron and steel products, fertilizers, wood and products, plastics and products and copper and products. By contrast, declines were in imports of organic and inorganic chemicals, synthetic fibers and raw sugar.

Likewise, the imports of investment goods rose by US$ 410.5 million or

28.5% to US$ 1.9 billion. This came as a main result of the pickup in the imports of pumps and fans and their parts; cars' accessories and spare parts; electric telephone and telegraph appliances; electric transformers, generators and engines and parts thereof; and computers. On the other hand, there was a decrease in the imports of some goods, mainly locomotives, trains and railway equipment; spinning and weaving machines and parts thereof; printing machines and their parts; and air conditioners.

- 63 -

Imports of consumer goods also surged by US$ 146.4 million or 20.9%,

mainly due to an increase of US$ 126.2 million or 25.1% in the imports of non-durable goods. The bulk of this rise was in pharmaceuticals; ready-made clothes; meat; fish; sugar and products; soap and detergents; livestock; cotton textiles; and insecticides. Conversely, the imports of tea, lentil, foodstuff remains and food preparations for animals, and wheat flour retreated.

Imports of fuel, mineral oils and products thereof decreased by US$ 52.2

million or 12.8%, to US$ 354.3 million. The decline was mainly in the imports of oil products (US$ 76.9 million). In contrast, payments of bunker and jet fueling went up by US$ 28.0 million, reaching US$ 35.0 million.

Commodity Distribution of Imports by Degree of Use

(US$ mn) July/September 2004/2005 2005/2006 Value % Value % Change

Total 5364.7 100.0 7229.2 100.0 1864.51-Fuel, mineral oils and products 406.5 7.6 354.3 4.9 (52.2)2- Raw materials 744.1 13.9 1329.2 18.4 585.13-Intermediate goods 1748.8 32.6 2175.5 30.1 426.74-Investment goods 1439.5 26.8 1850.0 25.6 410.55-Consumer goods 700.9 13.1 847.3 11.7 146.4

A. Durables 197.3 3.7 217.5 3.0 20.2B. Non-durables 503.6 9.4 629.8 8.7 126.2

6-Miscellaneous items, unclassified 324.9 6.0 672.9 9.3 348.0

- 64 -

4/2/2/2: Geographical Distribution of Export Proceeds

and Import Payments During July-September 2005-2006, the EU countries continued to rank first as a market for Egyptian exports, as exports thereto amounted to US$ 1.4 billion or 35.9% of total export proceeds. On top of this group came Italy, followed by the Netherlands, Spain, France, Germany and the UK.

The USA came second, as it absorbed exports of US$ 1.2 billion, or 30.7% of the total. The Arab countries followed, with US$ 448.6 million or 11.1%. In the forefront of the group came Saudi Arabia, followed by the UAE, Jordan, Libya, Tunisia, Lebanon, the Sudan and Syria. Exports to the Asian countries - mostly to India - reached US$ 441.6 million or 11.0% of the total. Singapore came next, followed by Hong Kong, South Korea, China and Japan.

Geographical Distribution of ExportsJuly/September 2005/2006

EU35.9%

Russian Federation & C.I.S.

0.3%

Other European countries

6.9%

U.S.A.30.7%

Arab Countries11.1%

African Countries1.6%

Other countries2.5%

Asian Countries11.0%

- 65 -

As for imports, the EU countries continued to be the main importer to Egypt. Imports from this group represented US$ 2.7 billion or 37.4% of total import payments. The UK topped this group, followed by Germany, France, Italy, the Netherlands, Belgium and Finland. The USA occupied the second position, as the payments for imports from this country reached US$ 1.5 billion or 20.2% of the total. Asian countries came third, as their share of imports represented US$ 1.0 billion or 14.2% of the total. China headed the group, followed by Japan, South Korea, Malaysia and India. Imports from the Arab countries reached US$ 558.8 million or 7.7% of the total, with the UAE being at the top, followed by Saudi Arabia, Algeria, Kuwait, Libya and Lebanon. Imports from the other European countries amounted to US$ 519.5 million or 8.2% of total imports.

Geographical Distribution of ImportsJuly/September 2005/2006

Other countries7.1%

EU37.4%

Other European countries

8.2%

Russian Federation & C.I.S.3.9%

U.S.A.20.2%

Australiaِ%٠٫٨

Arab Countries7.7%

Asian Countries14.2%

African Countries0.5%

- 66 -

Geographical Distribution of Merchandise Transactions (US$ mn)

July/September Export Proceeds Import Payments Trade Balance

2004/2005 2005/2006 2004/2005 2005/2006 2004/2005 2005/2006Grand Total 3109.3 4031.0 5364.7 7229.2 (2255.4) (3198.2)

% 100.0 100.0 100.0 100.0 EU 1145.4 1445.5 1737.6 2702.6 (592.2) (1257.1)

% 36.8 35.9 32.4 37.4 Other European Countries 172.8 279.6 494.2 591.5 (321.4) (311.9)

% 5.6 6.9 9.2 8.2 Russian Federation & CIS 14.8 12.1 82.4 281.8 (67.6) (269.7)

% 0.5 0.3 1.5 3.9 USA 1095.1 1236.8 1241.9 1457.7 (146.8) (220.9)

% 35.2 30.7 23.2 20.2 Arab Countries 345.9 448.6 457.9 558.8 (112.0) (110.2)

% 11.1 11.1 8.5 7.7 Asian Countries 274.5 441.6 906.3 1028.4 (631.8) (586.8)

% 8.8 11.0 16.9 14.2 African Countries 42.7 64.0 39.9 37.4 2.8 26.6

% 1.4 1.6 0.7 0.5 Australia 2.7 1.0 57.0 58.7 (54.3) (57.7)

% 0.1 0.0 1.1 0.8 Other Countries & Regions 15.4 101.8 347.5 512.3 (332.1) (410.5)

% 0.5 2.5 6.5 7.1

4/2/3: Services and Transfers The surplus on services dropped by 18.5% to US$ 2.2 billion. This was attributed to the increase in services payments by 61.3%, posting US$ 2.5 billion and in services receipts by 10.5%, reaching US$ 4.6 billion.

- 67 -

Balance of Services

(US$ mn) July/September

2004/2005 2005/2006 Change

+ (-) Services Balance 2661.6 2169.9 (491.7) Receipts 4182.1 4622.7 440.6 Transportation 1006.4 1164.6 158.2 Travel 2111.0 2321.9 210.9 Investment income 153.5 387.2 233.7 Government receipts 40.7 44.5 3.8 Other receipts 870.5 704.5 (166.0) Payments 1520.5 2452.8 932.3 Transportation 183.6 269.2 85.6 Travel 277.4 394.3 116.9 Investment income 354.9 509.8 154.9 Government payments 140.3 340.3 200.0 Other payments 564.3 939.2 374.9

All items in the services payments went up. As such, transportation

payments rose by 46.6%, due to the increase in the amounts transferred abroad by foreign navigation companies, and those transferred for the repairs of planes at foreign airports. Investment income payments went up by 43.6%, mainly due to the surge in the transfers of foreign oil companies and payments related to financial investment income. Government payments rose by 142.6%, mainly because of the increase in the expenses of Egyptian embassies, government medical care and salaries of the employees seconded abroad. The payments for travel went up by 42.1% due to the rise in the payments for tourism, medical treatment abroad and payments for tourism companies and hotels abroad, and for pilgrimage and “umra” purposes. Similarly, other payments∗ rose by 66.4% due to an increase in the amounts transferred abroad by Egyptian and foreign oil companies, together with the payments for construction and contracting and communication services, and brokerage commissions. * Its main sub-items are the amounts transferred abroad by Egyptian and foreign companies, and

payments for construction and contracting, and communication services.

- 68 -

Most items of the services receipts increased, with the exception of “other receipts”. Transportation receipts edged up by 15.7% to US$ 1.2 billion. This was a main result of the increase in the receipts of Suez Canal dues by 12.5% which emanated -in turn- from the rise in the number of transiting ships and their net tonnage, and in the receipts of the Egyptian airlines companies. Travel receipts∗ (tourism revenues) rose by 10.0%, to reach US$ 2.3 billion, as a result of the increase in the average tourist spending from US$ 75 to US$ 85 per night and the slight decrease in tourist nights by 3.0%. Likewise, investment income rose by 152.2%, to reach US$ 387.2 million, as an outcome of the rise in the interest on the banking system deposits, affected by high international interest rates. Government receipts rose by 9.3%, because of the rise in the expenses of the Arab League and international institutions resident in Egypt. Conversely, other receipts** fell by 19.1%, to reach US$ 704.5 million. Net unrequited transfers went up by US$ 279.2 million or 26.0%, to reach US$ 1.4 billion. This was attributed to a rise in private transfers by 56.0%, resulting mainly from the increase of 59.4% in workers' remittances. Meanwhile, official transfers declined by 65.9% to only US$ 90.3 million, against US$ 265.0 million, owing to a decrease in cash and commodity grants.

Unrequited Transfers

(US$ mn) July-September

2004/2005 2005/2006 Change

+ (-) Total 1075.8 1355.0 279.2 1- Official Transfers (Net) 265.0 90.3 -174.7

- Inward cash grants 36.0 16.4 -19.6 - Other inward grants 237.1 82.4 -154.7 - Outward grants -8.1 -8.5 -0.4

2- Private Transfers (Net) 810.8 1264.7 453.9 - Workers' remittances 802.8 1279.4 476.6 - Other transfers 14.0 8.4 -5.6 - Foreigners' transfers abroad -6.0 -23.1 -17.1

* Calculated on the basis of the number of tourist nights multiplied by the average tourist spending per

night. ** The main sub-items are the receipts of communication services, receipts of foreign companies, legal

and consultation fees, and agencies' commissions and fees.

- 69 -

4/2/4: Capital and Financial Account

Capital and financial account revealed a net inflow amounting to US$ 1.8

billion, against a net outflow of US$ 1.4 billion. This was an outcome of the improvement in foreign investment in its two types (direct∗ and portfolio ∗∗ ). The two types combined revealed a total inflow of US$ 7.1 billion and a total outflow of US$ 2.6 billion during July-September 2005-2006, against US$ 1.2 billion and US$ 0.4 billion, respectively during the corresponding period of the previous FY. This led to an increase in foreign investment in Egypt (net) that realized a net inflow of US$ 4.5 billion. Of this amount, net FDI represented US$ 1.9 billion, including investment flows of US$ 919.5 million in the petroleum sector and the proceeds of selling some local companies to foreign investors in the amount of US$ 418.7 million. During the corresponding period of the previous FY, foreign investment inflows stood at US$ 0.8 billion, including net FDI of US$ 774.5 million (of which US$ 524.8 million were investment flows in the petroleum sector and US$ 9.0 million worth were the proceeds of selling some local companies to foreign investors). During the reporting period, foreigners' transactions on the Egyptian Stock Exchange resulted in net sales of US$ 206.9 million, against net purchases of US$ 29.5 million. As such, purchases reached US$ 1786.2 million and sales reached US$ 1993.1 million, against US$ 438.9 million and US$ 409.4 million, respectively. It is worthy to note that net portfolio investment in Egypt includes purchases of banks and insurance companies in Egypt of sovereign dollar bonds in the amount of US$ 17.5 million during the period of review, against their sales of US$ 9.1 million during the period of comparison. Net portfolio investment also includes foreigners' subscriptions of US$ 2.8 billion for Egyptian bonds and notes. ∗ Representing total flows of FDI in Egypt (less capital repatriation) and foreign investors' equity

participation in local enterprises that is equal to 10% or more of the capital of any enterprise. ∗∗ Representing foreigners' net portfolio (according to the CMA statement). This excludes foreign

investors' equity participation in local enterprises, which is equal to 10% or more of the capital of any enterprise. Included also is the data of trading in Egyptian bonds and notes.

- 70 -

Moreover, net outflows of other assets and liabilities rose to US$ 2.7 billion

(mainly the change in banks' foreign assets and liabilities, the CBE's non-reserve foreign assets and the counterpart of some items of the current account), against US$ 2.4 billion. It is noteworthy that other assets (other) recorded net outflows of only US$ 0.7 billion, against US$ 1.2 billion, as a main outcome of the increase in banks' purchases of foreign banknotes and the decline in the difference between tourism revenues calculated on the basis of the number of tourist nights and the average tourist spending per night and those in banks' statistics. The decline in the said difference reflected the disappearance of the black market and hence tourists' exchange of foreign currencies through banks.

As for medium- and long-term borrowing, it revealed net repayments of US$

446.6 million, against US$ 322.5 million. This reflected the decrease in total disbursements, which recorded only US$ 122.0 million, against US$ 199.3 million, and the increase in total repayments to US$ 568.6 million, against US$ 521.8 million.

- 71 -

Capital and Financial Account (US$ mn)

July/September 2004/2005 2005/2006*

Capital and Financial Account -1410.8 1809.3 Direct Investment in Egypt (Net)** 774.5 1947.0 Direct Investment Abroad -5.0 -18.6 Portfolio Investment in Egypt (Net) 38.6 2579.2 Bonds*** 9.1 2786.1 Portfolio Investment Abroad 72.9 78.5 Other Investments (Net) -2291.8 -2776.8 - Disbursements 598.4 529.1

• Medium- and long-term loans 193.8 120.2 • International and regional institutions 165.1 98.8 • Bilateral loans 28.7 21.4 • Suppliers' and buyers' credit, medium- and long-term 5.5 1.8 • Suppliers' and buyers' credit, short-term (net) 399.1 407.1

- Repayments -521.8 -568.6 • Medium- and long-term loans -444.8 -515.7 • International and regional institutions -112.9 -163.6 • Bilateral loans -331.9 -352.1 • Suppliers' and buyers' credit, medium- and long-

term -77.0 -52.9

- Other Assets -2093.2 -2293.8 CBE -0.8 5.6 Banks -899.6 -1550.1 Others -1192.8 -749.3

- Other Liabilities -275.2 -443.5 CBE 0.9 1.7 Banks -276.1 -445.2 * Provisional figures ** Including net FDI in the petroleum sector, reaching US$ 419.9 million during July-September

2005, against US$ 524.8 million during the corresponding period, in addition to the proceeds of selling some local companies and productions assets to foreign investors at a value of US$ 418.7 million, against US$ 9.0 million

*** US dollar denominated sovereign bonds, issued pursuant to Law No. 147 of 2001, and floated on the international and local markets on 1/7/2001. They comprise 5-year bonds at a nominal value of US$ 500 million and a cost of 7.625%, and 10-year bonds at a nominal value of US$ 1 billion and a cost of 8.75%, in addition to foreigners' subscriptions for other Egyptian bonds and notes at a value of US$ 2.8 billion

- 72 -

4/3: International Finance

According to the data of international finance, net resource inflows increased by US$ 3.4 billion to US$ 4.6 billion during July-September 2005-2006, against US$ 1.2 billion during the corresponding period of the previous fiscal year. This was mainly due to a rise in foreign investment in Egypt (direct and portfolio) from a net inflow of US$ 0.8 billion during the period of comparison to US$ 4.5 billion during the reporting period. Such a rise was attributed to a step-up in the net inflow of FDI in Egypt to US$ 1.9 billion, including net investments of US$ 419.9 million in the petroleum sector and the proceeds of selling local capital assets to foreign investors in the amount of US$ 418.7 million during the period of review (against US$ 774.5 million, including investments of US$ 524.8 million in the petroleum sector and US$ 9.0 million representing the proceeds of selling local capital assets to foreign investors during the period of comparison). Portfolio investment in Egypt rose to a net inflow of US$ 2.6 billion, including foreigners' holdings of Egyptian bonds and notes at a value of US$ 2.8 billion, against US$ 38.6 million during July-September of FY 2004-2005. As for medium- and long-term loans and facilities, net repayments reached US$ 446.6 million, against US$ 322.5 million during the corresponding period of the previous FY.

- 73 -

Net Resource Flows (US$ mn)

July/September 2004/2005 2005/2006+ Change

Total Net Flows 1222.6 4636.9 3414.3 - External Debt 76.6 -39.5 -116.1

• Bilateral loans -303.2 -330.7 -27.5 Disbursements 28.7 21.4 -7.3 Principal repayments -331.9 -352.1 -20.2

• International institutions' loans 52.2 -64.8 -117.0 Disbursements 165.1 98.8 -66.3 Principal repayments -112.9 -163.6 -50.7

• Medium- and long-term suppliers' and buyers' credit -71.5 -51.1 20.4 Disbursements 5.5 1.8 -3.7 Principal repayments -77.0 -52.9 24.1

• Short-term suppliers' and buyers' credit (net) 399.1 407.1 8.0

- Official Grants (Net) 265.0 90.3 -174.7 - Direct Investment in Egypt (Net)++ 774.5 1947.0 1172.5 - Direct Investment Abroad -5.0 -18.6 -13.6 - Portfolio Investment in Egypt (Net) 38.6 2579.2+++ 2540.6

• Bonds 9.1 2786.1 2777.0 - Portfolio Investment Abroad 72.9 78.5 5.6 + Provisional ++ Representing total flows of FDI in Egypt less capital repatriation +++ Including foreigners' subscriptions for Egyptian bonds and notes Net resource transfers (net inflows less interest payments and profit transfers) unfolded an inflow of US$ 4.1 billion, during July-September 2005-2006, against US$ 0.9 billion during the corresponding period of the previous fiscal year. This was attributed to a rise in resource inflows by US$ 3.4 billion, to reach US$ 4.6 billion. However, this rise was mitigated by the increase in outflows by US$ 154.9 million, to reach US$ 509.8 million, fuelled by larger profit transfers of both FDI and portfolio investment and higher interest payments on deposits at Egyptian banks.

- 74 -

Net Resource Transfers from Abroad (US$ mn)

July/September 2004/2005 2005/2006+ Change

Net Transfers of Resources 867.7 4127.1 3259.4 - Net Inflows of Resources 1222.6 4636.9 3414.3 - Outflows (interest payments and profit

transfers): -354.9 -509.8 -154.9 1-External Loans and Facilities -177.3 -169.2 8.1

o Bilateral loans -142.7 -135.6 7.1 o International institutions' loans -28.6 -28.4 0.2 o Suppliers' and buyers' credit -6.0 -5.2 0.8

2- Deposits at Egyptian Banks -9.7 -10.2 -0.5 3- Profit Transfers of FDI -139.3 -265.4 -126.1 4- Profit Transfers of Portfolio Investment -28.6 -65.0 -36.4

+ Provisional 4/3/1: Foreign Direct Investment

(FDI) in Egypt During July-September 2005-2006, net foreign direct investment in Egypt remarkably rose by US$ 1.2 billion, reaching US$ 1.9 billion. This rise was manifest in the investment inflows from the EU countries, particularly the United Kingdom, Spain, France and Greece. Likewise, inflows from the USA stepped up by US$ 973.2 million, reaching US$ 1.4 billion. Moreover, capital repatriation (of FDI) reached US$ 607.7 million during the period of review, mostly from the capital transfers of foreign oil companies.

- 75 -

Direct Investment in Egypt (US$ mn)

July/September 2004/2005 2005/2006

Change (-)

Flows of Direct Investment in Egypt (Net) 774.5 1947.0 1172.5 Inflows 774.5 2554.7 1780.2 USA 414.8 1388.0 973.2 EU, of which: 10.3 1060.0 1049.7

Germany 0.9 38.9 38.0 France 0.2 262.4 262.2 UK 0.1 359.5 359.4 Italy 0.1 2.3 2.2 Greece 83.4 83.4 Spain 310.1 310.1 The Netherlands 9.0 0.5 -8.5 Norway 2.3 2.3 Denmark 0.6 0.6

Arab Countries, of which: 1.8 39.8 38.0 Saudi Arabia 1.2 1.2 UAE 0.8 2.6 1.8 Kuwait 23.9 23.9 Libya 3.8 3.8 Bahrain 7.0 7.0 Qatar 1.0 1.1 0.1 Others 0.2 0.2

Rest of the World, of which: 347.6 66.9 -280.7 Switzerland 6.2 4.2 -2.0 Japan 31.5 3.7 -27.8 Taiwan 0.3 -0.3 India 9.0 -9.0 Other countries 300.6 59.0 -241.6

Capital Repatriation 0.0 -607.7 -607.7

- 76 -

4/3/2: Official Grants (Net)

Net flows of official grants reached US$ 90.3 million during July-September 2005/2006, against US$ 265.0 million, with a remarkable decline of US$ 174.7 million or 65.9%, given the noticeably weak grants from the USA.

Official Grants (US$ mn)

July-September 2004/2005 2005/2006 Change

Net Official Grants 265.0 90.3 -174.7 - Inward cash grants 36.0 16.4 -19.6 - Other inward grants 237.1 82.4 -154.7 - Outward grants -8.1 -8.5 -0.4 According to the Ministry of International Cooperation, total grant commitments during July-September 2005-2006 decreased by 58.7%, to register US$ 130.2 million, against US$ 314.9 million during the corresponding period of the previous fiscal year. This was attributed mainly to the sharp drop in the value of commitments with the USA.

- 77 -

New Commitments and Net Actual Flows of Official Grants (US$ mn)

Commitments Actual Flows July-September 2004/2005 2005/2006 2004/2005 2005/2006 Net Official Grants 265.0 90.3 Inward Grants 314.9 130.2 273.1 98.8 USA 280.6 124.1 267.5 77.4 Japan 0.5 0.1 Germany 5.1 8.4 UK 0.1 Italy 0.1 Belgium 12.0 Canada 15.2 0.4 0.6 Austria 0.1 USAID 19.1 Arab Fund for Economic and Social Development 5.0 World Bank 0.6 Other countries 0.1 Outward Grants

-8.1 -8.5

A sectoral breakdown of grant commitments during July-September 2005-2006 shows a decline of US$ 184.7 million in the value of commitments. Such a decline was ascribed to the decrease in the total commitments for services sectors by 61.0%, to reach US$ 119.2 million.

- 78 -

Breakdown of External Grant Commitments (By Beneficiary)

(US$ mn) July/September

2004/2005 % 2005/2006 % Change

Total 314.9 100.0 130. 2 100.0 -184.7 Production Sectors: 9.4 3.0 11.0 8.4 1.6 Agriculture and irrigation 2.0 0.6 8.4 6.4 6.4 Manufacturing 2.6 2.0 2.6 Potable water & sanitary sewage 3.4 1.1 -3.4 Construction and building 4.0 1.3 -4.0 Services Sectors: 305.5 97.0 119.2 91.6 -186.3 Transportation, communications and information 5.6 4.3 5.6 Wholesale and retail trade 200.0 63.5 -200.0 Financial intermediation and subsidiary activities 11.0 3.5 -11.0 General government 31.3 9.9 41.3 31.8 10.0 Education and health 63.2 20.1 62.3 47.8 -0.9 Others 10.0 7.7 10.0

4/3/3: External Debt

The outstanding external debt denominated in US dollar (mostly due on the public sector) totaled US$ 29.7 billion at end of September 2005, with a rise of US$ 0.7 billion as compared with the end of June 2005. This was mainly attributed to the increase in net disbursements of loans and facilities by US$ 0.8 billion (disbursements of loans and facilities recorded US$ 1.4 billion and repayments of principals US$ 0.6 billion), coupled with the decrease of the external debt balance by US$ 0.1 billion, as a result of the depreciation of most currencies of borrowing against the US$ dollar at end of September 2005. Medium- and long-term external debt recorded US$ 28.0 billion (94.1% of total external debt) at end of September 2005. Short-term debt amounted to US$ 1.7 billion or 5.9% of the total (50.9% of this amount is owed by the private sector).

- 79 - A breakdown of Egypt's external debt indicates that medium- and long-term loans and facilities owed to Paris Club members reached US$ 18.9 billion or 63.7% of the total. The debts due to non-members of the Paris Club amounted to US$ 744.1 million or 2.5%. Suppliers' and buyers' credit registered US$ 747.4 million or 2.5%.

Structure of External Debt (US$ mn)

June 2005 September 2005


Importance

Change (-)

Total External Debt 28948.8 100.0 29674.4 100.0 725.6 - Rescheduled bilateral loans 15734.1 54.4 15373.3 51.8 (360.8)

• Concessional 7836.4 27.1 7707.0 26.0 (129.4) • Non-concessional 7897.7 27.3 7666.3 25.8 (231.4)

- Other bilateral loans 4291.3 14.8 4272.7 14.4 (18.6) • Paris Club countries 3529.9 12.2 3528.6 11.9 (1.3) • Others 761.4 2.6 744.1 2.5 (17.3)

- International and regional institutions 5058.2 17.5 5088.1 17.1 29.9

- Suppliers' and buyers' credit 781.6 2.7 747.4 2.5 (34.2) - Egyptian bonds and notes* 613.6 2.1 1846.1 6.2 1232.5 - Long-term deposits 500.0 1.7 500.0 1.7 0.0 - Short-term loans 1854.8 6.4 1736.5 5.9 (118.3)

• Deposits 819.3 2.8 732.9 2.5 (86.4) • Facilities 1035.5 3.6 1003.6 3.4 (31.9)

- Debt of private sector (non-guaranteed) 115.2 0.4 110.3 0.4 (4.9)

* The nominal value of US dollar bonds is US$ 1500 million. Financial institutions resident in Egypt purchased these bonds from the secondary market in the amount of US$ 903.9 million, resulting in an external debt of US$ 596.1 million at end of September 2005.

External debt due to international and regional institutions reached about

US$ 5.1 billion, or 17.1% of the total at end of September 2005, 91.4% of which is owed by the public sector. The balance of Egyptian bonds and notes (held by non-residents) reached US$ 1.8 billion or 6.2%, against US$ 613.6 million at end of June 2005. Moreover, long-term deposits posted 1.7% and the non-guaranteed debts of the private sector US$ 110.3 million or 0.4% of the total at end of September 2005.

- 80 -

The breakdown of Egypt's external debt by creditor indicates that 55.2% of the total debt was due to the four major member countries of Paris Club; France (15.5%), the USA (15.1%), Japan (13.4%) and Germany (11.2%). Debt due to the Arab countries combined reached 4.3% of the total. Kuwait came first (1.6%), followed by Saudi Arabia (0.9%) and the UAE and Bahrain (0.5% for each). The debts due to international and regional institutions constituted 17.1%, mainly owed to the International Development Association (4.6%) and the European Investment Bank (4.3%).

External Debt by Type End of September

Short-term debt

International &Regional Institutions

Other bilateral debt

Rescheduled bilateral debt

Suppliers' & buyers' credits

Private sector debt (non-guaranteed)

Long-term deposits

Egyptian bonds and notes

0

5000

10000

15000

20000

25000

30000

35000

2003 2004 2005

(US$ mn)

- 81 -

External Debt by Main Creditor (US$ mn)

June 2005 Sept. 2005 At End of


ImportanceTotal External Debt 28948.8 100.0 29674.4 100.0 USA 4581.4 15.8 4464.5 15.1 Japan 4064.3 14.0 3968.4 13.4 EU Countries, of which: 11266.0 39.0 11199.3 37.7

France 4763.3 16.5 4613.3 15.5 Germany 3355.5 11.6 3326.4 11.2 Spain 824.0 2.8 819.4 2.8 Italy 802.7 2.8 782.6 2.6 UK 574.7 2.0 656.8 2.2 Austria 551.0 1.9 536.7 1.8 Others 394.8 1.4 464.1 1.6

Arab Countries, of which: 1400.1 4.8 1268.7 4.3 Kuwait 469.4 1.6 470.6 1.6 Saudi Arabia 249.3 0.9 254.5 0.9 UAE 149.6 0.5 151.4 0.5 Bahrain 146.8 0.5 140.4 0.5 Others 385.0 1.3 251.8 0.8

Other Countries 1965.2 6.8 1839.3 6.2 Switzerland 464.1 1.6 449.6 1.5 Canada 245.9 0.8 248.7 0.8 Australia 225.3 0.8 199.5 0.7 China 111.0 0.4 111.6 0.4 Others 918.9 3.2 829.9 2.8

Egyptian Bonds and Notes 613.6 2.1 1846.1 6.2 International & Regional Institutions 5058.2 17.5 5088.1 17.1

IDA 1375.1 4.8 1360.1 4.6 European Investment Bank 1103.7 3.8 1265.2 4.3 Arab Fund for Economic & Social Development 996.3 3.4 992.0 3.3 African Development Fund & Bank 521.1 1.8 513.9 1.7 World Bank 397.2 1.4 385.3 1.3 AMF 326.1 1.1 323.8 1.1 Islamic Development Bank (Jeddah) 236.4 0.8 157.0 0.5 Others 102.3 0.4 90.8 0.3

- 82 -

Distribution of the external debt by debtor at end of September 2005 indicates that the debt owed by the central government rose by US$ 842.8 million, reaching US$ 19.1 billion and other sectors by US$ 29.6 million, to reach US$ 7.8 billion at end of September 2005. Conversely, debt owed by banks and the monetary authority declined by US$ 137.6 million and US$ 9.2 million, respectively, to reach US$ 1.9 billion and US$ 973.8 million, in order. Nevertheless, these developments had no effect whatsoever on the breakdown of the external debt structure by debtor at end of September 2005, as the government debts continued to account for 64.2% of the total, followed by the other sectors (26.1%), banks (6.4%) and the monetary authority (3.3%).

External Debt by Debtor (US$ mn)

June 2005 September 2005 At End of

Value Relative

ImportanceValue

Relative Importance

Total External Debt 28948.8 100.0 29674.4 100.0 Medium- and long-term debt 27094.0 93.6 27937.9 94.1 Short-term debt 1854.8 6.4 1736.5 5.9 Central government and local government 18231.0 63.0 19073.8 64.2

Medium- and long-term debt 18231.0 63.0 19073.8 64.2 Short-term debt 0.0 0.0 0.0 0.0

Monetary Authority 983.0 3.4 973.8 3.3 Medium- and long-term debt 833.0 2.9 823.8 2.8 Short-term debt 150.0 0.5 150.0 0.5

Banks 2010.5 6.9 1872.9 6.4 Medium- and long-term debt 1063.9 3.6 1037.0 3.5 Short-term debt 946.6 3.3 835.9 2.9

Other Sectors 7724.3 26.7 7753.9 26.1 Medium- and long-term debt 6966.1 24.1 7003.3 23.6 Short-term debt 758.2 2.6 750.6 2.5

- 83 -

As for Egypt’s external debt service (principal repayments and interest payments), it augmented by US$ 40.0 million, totaling about US$ 761.9 million during the period under review. This increase resulted from a rise of US$ 46.8 million in principal repayments, to post US$ 568.6 million, and a drop of US$ 6.8 million in interest payments, to reach US$ 193.3 million.

In spite of the rise in external debt service, the 19.6% increase in exports of

goods and services, as well as in transfers during July-September 2005-2006 led to an improvement in the ratio of the debt service to current receipts (including transfers) from 8.6% in the period of comparison to 7.6% during the reporting period. Likewise, the ratio of the debt service to the export proceeds of goods and services improved from 9.9% to 8.8%.

External debt as a percentage of GDP ameliorated to 28.8% at end of September 2005, against 34.2% at end of September 2004. The ratio of short-term debt to total debt declined to 5.9% against 6.9%, and to net international reserves to 8.2% against 13.8%. On the other hand, there was a slight drop in external debt per capita to US$ 405.4 at end of September 2005 against US$ 409.9 at end of September 2004.

Main Indicators of External Debt (%)

July/September 2003/2004 2004/2005 2005/2006

Debt balance/GDP 36.9 34.2 28.8 Debt service/exports of goods and services 11.9 9.9 8.8 Debt service/current receipts and transfers 10.4 8.6 7.6 Interest*/exports of goods and services 3.6 2.7 2.2 Interest*/current receipts and transfers 3.2 2.4 1.9 Short-term debt/ debt (end of period) 6.6 6.9 5.9 Short-term debt/NIR (end of period) 13.1 13.8 8.2 External debt per capita (US$) (end of period) 414.0 409.9 405.4 * Including interest payments on dollar - denominated sovereign bonds

- 84 -

During July-September 2005-2006, commitments on loans and facilities registered only US$ 85.0 billion, extended by international and regional institutions (European Investment Bank and Islamic Development Bank).

A breakdown of the external debt by main currencies (US$, euro, Japanese yen) indicates, as shown in the following table, that the US dollar accounted for the bulk of total external debt, with a relative importance of 42.7%. The euro followed with 30.9% and the Japanese yen with 12.6%.

External Debt by Main Currencies (US$ mn)

June 2005 September 2005 At End of Value Relative

Importance Value Relative

Importance Total 28948.8 100.0 29674.4 100.0 US Dollar 11678.8 40.3 12666.4 42.7 Canadian Dollar 154.0 0.5 160.0 0.5 Australian Dollar 142.0 0.5 139.0 0.5 Swiss Franc 561.0 1.9 547.0 1.8 Pound Sterling 254.0 0.9 245.0 0.8 Japanese Yen 3842.0 13.3 3740.0 12.6 Danish Krone 139.0 0.5 139.0 0.5 Norwegian Krone 28.0 0.1 28.0 0.1 Swedish Krona 38.0 0.1 36.0 0.1 Kuwaiti Dinar 1424.0 4.9 1416.0 4.8 Saudi Riyal 38.0 0.1 42.0 0.1 UAE Dirham 48.0 0.2 48.0 0.2 Euro 9276.0 32.1 9158.0 30.9 SDRs 1326.0 4.6 1310.0 4.4

- 85 -

5- Cotton 5/1: Domestic Developments

With a view to maintaining the world market share of the Egyptian cotton, the government’s policy efforts focused, during 2005/2006, on modernization of cotton mills. This is in addition to setting up a higher committee to be responsible for addressing the problems of cotton production and marketing. The government also continued to provide subsidies and technical assistance to cotton growers. In the same vein, a modern “Textile Technology Centre” was established at the headquarters of the Egyptian Cotton Textile Consolidation Fund (TCF). A new variety of Giza 87 was genetically engineered, which is characterized by its high productivity and the excellence of its quality worldwide. Hereinafter are the main developments that took place during the season on both demand and supply sides.

5/1/1: Production

According to the estimates of the Cotton Arbitration, Testing and Grading Organization (CATGO) during 2005-2006 season, the cultivated area amounted to about 650 thousand feddans; i.e., 11.1% less than the final estimates of the cultivated areas of the previous season, and 4.8% above the targeted area (620 thousand feddans)*. The area cultivated with long-staple varieties constituted 76.3% of the total cultivated land, whereas extra-long staples accounted for the rest. _________________________ * Estimates of the Holding Company of Spinning and Weaving and Ready-Made Clothes (HC-

SWRMC).

- 86 -

Area and Production of Cotton Varieties

Area (Thousand Feddans)

Production (Thousand Metric Cantars)

2004/2005 2005/2006*

Change + (-) %

2004/2005 2005/2006*

Change + (-) %

Total 731 100.0 650 100.0 (11.1) 5833 100.0 5520 100.0 (5.4)

Extra-long staple 197 26.9 154 23.7 (21.8) 1551 26.6 1205 21.8 (22.3)

Long staple 534 73.1 496 76.3 (7.1) 4282 73.4 4315 78.2 0.8

Source: CBE (Alexandria Branch), Securities and Cotton Department. * Estimates of the Cotton Arbitration, Testing and Grading Organization (CATGO). According to the estimates of the CATGO, cotton output totaled about 5.5 million metric cantars during 2005-2006 season, down by 5.4% as compared with the previous season, in spite of the 6.3% rise in the average productivity per feddan, to post 8.5 cantars/feddan. The decline is rather attributable to the cancellation of the “floor prices” system during the reporting season, a matter that prompted farmers to grow other profitable and low risk crops instead of cotton.

5/1/2: Stock and Total Supply

During 2005-2006 season, total supply shrank to 5.7 million metric cantars, down by 8.7% as compared with the previous season. This was ascribed to the decline of production by 313 thousand metric cantars, and the decrease in the opening stock of 2005-2006 season by 39.5%, to post 149 thousand metric cantars. This came as an outcome of the strong world demand on Egyptian cotton in the previous season, thanks to the successful marketing efforts.

- 87-

5/1/3: Domestic Consumption

Local mills received 46 thousand metric cantars during the 2005/2006 season up to end-September 2005, with a decline of 40.3% as compared with the corresponding period of the previous season.

Total Uses (thousand metric cantars)

2004/2005 Season Till its End Till 30-9-2004

2005/2006 Season

Till 30-9-2005 Total Uses 6223 239 179 Local mills 3283 77 46 Export commitments 2940 162 133

Source: Ibid. Although world cotton prices declined and importation of cotton for the public and private sectors was allowed during the season, no cotton imports had been reported till end- September 2005, compared with 784 thousand metric cantars during 2004-2005 season.

- 88 -

Egyptian Cotton Position

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Opening Stock Crop DomesticConsumption

Export Commitments

2004/2005 Season 2005/2006 Season

M.Metric Cantars

- 88 -

5/1/4: Export Commitments

It was decided to postpone the announcement of the cotton marketing system of 2005-2006 season till October 2005, due to uncertainties concerning trends of international cotton prices. Consequently, some export commitments have been made at preliminary reference prices, to be regularly revised according to the changes in both domestic and international markets. In this context, export commitments reached about 133 thousand metric cantars at end-September 2005.

Export Commitments by Variety and Exporter

(thousand metric cantars) 2005/2006 Season

From 1/9/2005 till 30/9/2005 Quantity % Total 133 100.0 By Variety Extra-long staples 50 37.6 Long-staples 83 62.4 By Exporting Companies Public business sector 84 63.2 Private sector 49 36.8

5/2: International Developments

According to the preliminary estimates of the International Cotton Advisory Commission (ICAC), the opening stock of the 2005/2006 season rose by 34.9%, to reach 50.2 million bales. World cotton production estimates declined by 4.9% to 114.6 million bales, due to lower production estimates for Central Asia, Argentina, Colombia, China and Brazil. Accordingly, total world supply of cotton was estimated at 164.8 million bales, up by 4.5% compared with the previous season. The ICAC estimates also indicate that world consumption is expected to rise by 2.8% over the level of the previous season, to reach 110.5 million bales because of higher estimates of world consumption in China, India and Pakistan.

- 89 -

Statistical Position of World Cotton (Million bales)

2004/2005 Season 2005/2006 Season Change +(-)% Opening Stock 37.2 50.2 34.9 World output 120.5 114.6 (4.9) Total Supply 157.7 164.8 4.5 World consumption 107.5 110.5 2.8 Carryover 50.2 54.3 8.2 International trade* 34.1 37.4 9.7 Source: International Cotton Advisory Commission (ICAC) * Calculated by the average value of exports and imports

Concerning the trends of cotton prices worldwide, they fluctuated throughout the season. As such, prices declined at the beginning of the season under higher estimates of the American production of the 2005/2006 season, and the likelihood of producing the amounts targeted for exportation. Add to this were the higher estimates of the Chinese production for the season, owing to larger productivity, which led to selling cotton at competitive prices. Then, prices became stable at the beginning of the last week of August because of the continued soft demand for cotton by many local mills in the Far East and Europe, amid a growing expectation of increasing the supply of raw cotton in the 2005/2006 season. However, prices trended upwards at the beginning of September due to a rise in the prices of New York futures, affected by the uncertainty about the American cotton output during that season. This uncertainty was attributed to the unfavourable weather conditions in some parts of the USA (Rita hurricane), which prompted the cotton producers to raise their selling prices.

According to ICAC estimates, the volume of world trade rose by 9.7% during the 2005/2006 season, to reach 37.4 million bales.

- 90-

6- Tourism

According to CAPMAS, tourist flows to Egypt during July/Sept., 2005/2006 indicate a decline in the number of tourists by 7.4% and of tourist nights by 2.9%, affected by the terrorist attacks on Sharm El Sheikh in July 2005. However, tourism revenues rose by 10.0%, to reach LE 2.3 billion, due to the increase of 13.3% and 1.6% in the tourist's average spending a night and average stay, respectively.

Tourism indicators

2003/2004 2004/2005 2005/2006

July/Sept. Change

+(-) %

July/Sept. Change

+(-) %

July/Sept. Change

+(-) %

Number of arrivals (000s)* 1939 23.8 2390 23.3 2214 (7.4) Number of departures (000s) 1799 26.1 2268 26.1 2167 (4.5) Number of tourist nights of departures (000s) 21769 119.8 28146 29.3 27316 (2.9) Average spending per tourist a night (US$)

75.0 (34.8) 75.0 0.0 85.0 13.3 Tourism revenues (US$ mn.) 1632.7 43.4 2111.0 29.3 2321.9 10.0 Average tourist stay (night) 12.1 75.4 12.4 2.5 12.6 1.6 Source: CAPMAS and CBE *Excluding non-resident Egyptians coming for temporary purposes.

- 91 -

6/1: Tourists

The number of arrivals from all tourist markets during July/Sept. of 2005/2006 totalled some 2.2 million, down by 176 thousand or 7.4% as compared with the corresponding period of the previous FY. Specifically, the number of tourists rose by 47 thousand or 5.9% during July 2005, then declined by some 134 thousand or 15.3% in August, and by 89 thousand or 12.4% in Sept. 2005. This was due to the fact that some travel companies cancelled their reservations for the two months. The decline in tourist flows was mainly from the Western Europe group. Arrivals from this group retreated by some 145 thousand or 13%. Of this drop, 139 thousand were from Italy alone. Moreover, arrivals from the group of Eastern Europe declined by some 26 thousand or 8.1% (11 thousand from Yugoslavia and 10 thousand from Poland).

Number of Arrivals (in thousand)

July/Sept. 2003/2004 2004/2005 2005/2006

Number Relative Weight

Change+(-)%


Change+(-)%


Change+(-)%

Total 1939 100.0 23.8 2390 100.0 23.3 2214 100.0 (7.4) On Monthly Basis July 623 32.1 26.1 793 33.2 27.3 840 37.9 5.9 August 743 38.3 29.4 877 36.7 18.0 743 33.6 (15.3) Sept. 573 29.6 15.1 720 30.1 25.7 631 28.5 (12.4) By Group Europe 1077 55.5 17.8 1437 60.1 33.4 1266 57.2 (11.9) Middle East 681 35.1 40.7 730 30.5 7.2 704 31.8 (3.6) Africa 58 3.0 11.5 72 3.0 24.1 77 3.5 6.9 Americas 50 2.6 6.4 65 2.7 30.0 72 3.3 10.8 Asia &Pacific 72 3.7 5.9 84 3.5 16.7 94 4.2 11.9 Others 1 0.1 0.0 2 0.1 100.0 1 0.0 (50.0) Source: Ibid.

- 92 - Likewise, arrivals from the Middle East declined slightly by some 26 thousand or 3.6%. The decline was pronounced in tourists from Israel (106 thousand) Jordan (2 thousand), and Bahrain (one thousand). However, there was a rise in the number of arrivals from other markets of the group, mainly Saudi Arabia (27 thousand), Palestine (19 thousand) and Libya (16 thousand). On the other hand, tourists from Asia and Pacific moved up by 10 thousand or 11.9%, mainly from India (4 thousand), and South Korea (3 thousand). In addition, arrivals from the Americas group rose by some 7 thousand or 10.8%, mostly from the USA (4 thousand). Arrivals from the group of Africa also mounted by 5 thousand, or 6.9%, of which, the Sudan contributed 60.0%.

Tourists, Nights and Revenues

-500500

150025003500450055006500750085009500

105001150012500

Jan 200

4Feb Mar Apr

May Jun Jul

Aug Sep OctNov

Dec

Jan 200

5Feb Mar Apr

May Jun Jul

Aug Sep-100.0

100.0

300.0

500.0

700.0

900.0

1100.0

1300.0

1500.0

Revenues( US$ million )

Nights ( Thousands )

Tourists ( Thousands )

Revenues (US$ mill ion)Tourists

(Thousands)

Nights(Thousands)

- 93 -

6/2: Tourist Nights

Total number of tourist nights spent by all departure groups during July-Sept. of FY 2005/2006 amounted to about 27.3 million (with a fall of 830 thousand or 2.9% compared with the corresponding period of the previous FY). As such, tourist nights rose by some 949 thousand during July 2005, then declined by some 1.2 million nights and by 571 thousand nights during August and Sept. 2005, respectively.

Number of Tourist Nights (In thousand)

July/Sept. 2003/2004 2004/2005 2005/2006


Change+(-)%


Change+(-)%


Change+(-)%

Total 21769 100.0 119.8 28146 100.0 29.3 27316 100.0 (2.9) On Monthly Basis July 4858 22.3 78.7 6960 24.7 43.3 7909 29.0 13.6 August 9349 43.0 121.2 12129 43.1 29.7 10921 40.0 (10.0) Sept. 7562 34.7 155.7 9057 32.2 19.8 8486 31.0 (6.3) By Group Europe 10751 49.4 93.6 14540 51.7 35.2 13479 49.4 (7.3) Middle East 8626 39.6 165.7 10494 37.3 21.7 10499 38.4 0.0 Africa 786 3.6 111.9 1028 3.6 30.8 1096 4.0 6.6 Americas 961 4.4 166.9 1187 4.2 23.5 1268 4.6 6.8 Asia & Pacific 631 2.9 72.4 877 3.1 39.0 955 3.5 8.9 Others 14 0.1 133.3 20 0.1 42.9 19 0.1 (5.0) Source: Ibid.

In line with the drop in the number of tourists from the European markets, tourist nights by departure from Western Europe declined by some 875 thousand or 7.6% compared with the corresponding period of the previous FY. The bulk of the decline was seen in Italy (1.2 million nights), Germany (386 thousand), Spain (88 thousand) and Austria (77 thousand). However, there was a rise in the number of tourist nights by departure from the UK (825 thousand), Scandinavia (159 thousand) and the Benelux (32 thousand).

- 94 -

Moreover, tourist nights by departures from Eastern Europe decreased by some 186 thousand or 6.0%, mostly from Yugoslavia (100 thousand) and Poland (89 thousand). However, there was a rise in the number of tourist nights by departures from the new Commonwealth states (57 thousand).

Although there was a decline in the number of arrivals from the Middle East markets, tourist nights by departures therefrom slightly increased by 5 thousand nights. As such, a rise was seen in the number of tourist nights by departure from Iraq (147 thousand), Saudi Arabia (118 thousand), Libya (55 thousand) and Qatar (34 thousand). However, tourist nights by departure from Israel declined by 414 thousand, Jordan by 18 thousand and Bahrain by 5 thousand.

The markets of Asia and Pacific group recorded a rise of 78 thousand or 8.9% in the number of tourist nights (by departure), mostly from Australia (22 thousand), India (20 thousand) and Japan (18 thousand).

Tourist nights by departures from the Americas group went up by 81 thousand or 6.8%, mostly from Canada (39 thousand) and the USA (27 thousand). Moreover, the number of tourist nights by departure from the group of Africa rose by 68 thousand, or 6.6%, of which the Sudan accounted for 82.4%.

International Developments

- 95 -

7- International Economic and Monetary Developments 7/1: Economic Developments

7/1/1: Economic Growth, Employment and Prices

During July/Sept. 2005, the performance of the world economy slightly improved, achieving a growth rate of 3.7% (against 3.6% during the corresponding period of 2004). The improvement was underpinned by the rise in the average growth rate of the G7 economies, reaching 2.9% during July/Sept. 2005 (against 2.2% during the corresponding period of 2004). The recovery was noticed in the euro area as a whole and the UK, although their growth rates were significantly lower than that of the American economy. The better performance of the world economy was also helped by the continued robust growth of the Chinese economy, posting 11.4%. This indicates that the Chinese economy continued to play - side by side with the American economy - an important role in promoting the world economy.

A key factor behind the better performance of the world economy during the period under review - despite the hike in energy prices, and the damages brought by the hurricanes that hit the countries overlooking the Gulf of Mexico- was the rise in investment spending, supported by strengthened financial positions of companies and their rising profitability. This was accompanied by a decline in global unemployment, which helped sustain the high growth of private consumption in some countries.

The improved performance of the world economy was concurrent with a

remarkable rise in equity prices on many of the major world exchanges. Moreover, economic growth increased in all major industrial countries (except Italy) during July/Sept. 2005, as compared with the corresponding period of 2004.

In the USA, economic growth rate rose from 4.0% during July/Sept. 2004 to 4.3% during the same period of 2005. This was mainly due to the fact that the private consumption growth, (two thirds of GDP), remained high at 4.3% during the period under review, against 3.4% during the preceding 3 months, and 4.4%

- 96 - during the period of comparison. In addition, the growth rate of investment spending on fixed assets increased. Most of the growth was concentrated in investments of software and equipment, including those needed for reconstructing the hurricane-damaged areas. The improvement in the US economic performance during the period under review could have been stronger, but for a number of factors. There was a slowdown in the private consumption growth under the impact of the decline in disposable income, coupled with higher inflation. Add to this was the effect of oil price hikes. Moreover, the successive increases in the short term interest rates had a negative impact on the US dollar; and the BOP current account deficit remained high.

In Canada, the economic growth rate also rose from 3.5% during July/Sept. 2004 to 3.6% during July/Sept. 2005. This was mainly ascribed to the significant pickup of investment in fixed assets, supported by the new investments made in the oil sector in response to the increase in oil prices. Add to this was a 13.9% growth in the volume of exports during July/Sept. 2005 (annual basis), due to the buoyant demand of the USA on Canadian exports under the better economic performance of the USA.

As for the euro area, economic growth has kept rising since January/March 2005, to reach 2.6% during July/Sept. 2005 (against 1.1% in July/Sept. 2004). The rise was stimulated by the marked improvement in the economic growth of Germany and France. The stronger performance of the economy of the euro area was also helped by robust domestic and external demand on its products.

- 97 -

Economic Growth Rates (%)

July/Sept. 2004 2005

USA 4.0 4.3 Canada 3.5 3.6 Japan 0.5 1.0 Germany -0.3 2.5 France 0.2 2.7 Italy 1.6 1.1 UK 1.1 1.6 Euro area 1.1 2.6

Source: Global Economic & Policy Research, World Financial Markets, JP Morgan Dec. 2005.

Economic growth in the UK also mounted from 1.1 % during July/Sept. 2004 to 1.6% during the corresponding period of 2005. The rise was principally ascribed to the sustainable growth of private consumption, and the higher flows of foreign investments to the UK to finance merger and acquisition operations.

In Japan, economic growth scaled up to 1.0% during the period under review (against 0.5% during the corresponding period). The better performance of the Japanese economy was mainly attributed to the buoyant domestic demand that became a major driving force for the economy, instead of the slackened external demand. The continued pursuit of an expansionary monetary policy by the Bank of Japan has also enabled the Japanese economy to curb its deflationary pressures.

Unemployment decelerated in the USA from 5.4% in Sept. 2004 to 5.1% in Sept. 2005. In the euro area, it fell from 8.8% to 8.4%, affected by lower unemployment in France and Italy. It also retreated in Japan from 4.6% to 4.2% and in Canada from 7% to 6.7%.

- 98 -

Inflation and Unemployment (%)

Unemployment Rate Inflation Rate Year Ending at End of Sept. 2004 2005 2004 2005 USA 5.4 5.1 2.5 4.7 Canada 7.0 6.7 1.8 3.4 Japan 4.6 4.2 0.0 -0.3 Germany 10.7 11.7 1.8 2.5 France 10.0 9.8 2.1 2.2 Italy 8.1 7.5 2.8 2.1 UK 4.7 4.7 1.1 2.5 Euro area 8.8 8.4 2.2 2.1

Source: The Economist, (various issues)

As for inflation in major industrial countries during the year ending Sept. 2005, as compared with the year ending Sept. 2004, it rose from 2.5% to 4.7% in the USA, from 1.1% to 2.5% in the UK and from 1.8% to 3.4% in Canada. By Contrast, inflation slightly moderated in the euro area as a whole from 2.2% to 2.1%. In Japan, inflation switched to a negative level, despite the better performance of the Japanese economy. This indicated that the Japanese economy was not entirely free from all the deflationary pressures.

7/1/2: Primary Commodity Prices

The primary commodity price index (2000=100) continued to rise by 11.0% during July/Sept. 2005. This was mainly due to an increase in world demand for these commodities, which outpaced their supply. Another contributing factor was the rise in the price index of energy by 14.6%, agricultural raw materials by 6.7%, and metals by 3.5%. However, a drop was seen in the price index of beverages by 10.6% and foodstuffs by 0.7%.

World energy prices kept increasing during the period under review, affected by the decrease in world supply. This was mainly ascribed to the hurricanes that hit the Caribbean region and led to ceasing most of the production of the Mexican Gulf (contributing about 25% of the US production of oil). Add to this were the rising political tensions in the Middle East.

- 99 -

Metal prices soared largely due to the higher prices of zinc by 9.7% and copper by 9.1%, mainly because of the stronger demand thereon by China. Moreover, gold prices mounted by 5.9%, as a result of the increasing demand on gold as a store of value, especially with the rising inflation in many parts of the world due to the sharp rise in oil prices. However, there was no significant increase in the world supply of gold. On the other hand, the prices of tin declined by 10.9% and lead by 5.1%.

As for the prices of agricultural raw materials, the rise was mainly seen in rubber (13.9%), and cotton (1.9%). Conversely, the prices of wool retreated by 6.4%. Moreover, prices of beverages decreased as an effect of the drop in coffee prices (17.4%), and cocoa (2.2%). In foodstuffs, prices declined mainly because of the falling prices of soya bean (16.9%). However, the prices of wheat went up by 12.5%.

- 100 -

7/2: Monetary Developments

7/ 2/1: Discount Rates

With the rise in inflationary pressures during July/Sept. 2005, the USA and

Canada continued to adopt restrictive monetary policies. As such, the American Federal Reserve decided to raise the discount rate twice - by 0.25% each- during August and Sept. 2005, to reach 4.75%. Accordingly, the discount rate was raised eleven times since the 1st of June 2004. The aim behind this was to enable the monetary policy to attune to the objective of achieving price stability on the one hand and the objective of realizing an appropriate degree of economic growth in the USA, on the other hand. The Bank of Canada also raised the discount rate by 0.25% during Sept. 2005, to reach 3%. However, the Bank of England reduced the repo rate by 0.25% to 4.5% during August 2005, with a view to activating investments and spurring the British economic growth. In the meantime, the European Central Bank maintained the euro repo rate at 2%. The Bank of Japan has also kept the discount rate at a level close to zero (0.10%) to enhance the Japanese economic growth.

Discount Rates (Annually %)

2004 2005 December March June Sept.

USA 3.25 3.75 4.25 4.75 Canada 2.75 2.75 2.75 3.00 Japan 0.10 0.10 0.10 0.10 UK* 4.75 4.75 4.75 4.50 Euro area* 2.00 2.00 2.00 2.00

Sources: IFS, Reuters & Financial Times, (various issues) * Repo rate

- 101 -

7/2/2: Exchange Rates

Exchange rate developments during July/Sept. 2005 indicate that the US dollar appreciated against most major currencies, except for the Canadian dollar. Hence, the euro depreciated vis-à-vis the US dollar from 0.8270 per dollar at the end of June 2005, to 0.8304 at the end of Sept. 2005, the pound sterling from 0.5576 to 0.5662, and the Japanese yen from 110.4 to 113.15. Meanwhile, the Canadian dollar appreciated against the US dollar from 1.2256 a dollar to 1.1611. Accordingly, the unit of SDRs depreciated vis-à-vis the US dollar from 0.6865 at the end of June 2005 to 0.6899 at the end of Sept. 2005.

The US dollar appreciation vis-à-vis most major currencies was a main result of the successive increases in US dollar interest rates and the higher willingness of investors to hold US financial assets - especially the 10-year treasury bonds, because of their higher interest rates.

Exchange Rates of Main Currencies against the US Dollar (Units of Currency per US Dollar)

2004 2005 Change (%)

At End of Dec. March June Sept. July/Sept. 2005Canadian dollar 1.2036 1.2096 1.2256 1.1611 (5.3) Sterling Pound 0.5178 0.5312 0.5576 0.5662 1.5 Japanese yen 104.1200 107.3500 110.4000 113.1500 2.5 Euro 0.7342 0.7714 0.8270 0.8304 0.4 SDRs 0.6439 0.6619 0.6865 0.6899 0.5

Source: IFS, various issues

- 102 -

7/2/3: International Reserves

Total international reserves (excluding gold) reached SDR 2849.0 billion at the end of Sept. 2005, recording a rise of SDR 72.4 billion or 2.6% during July/Sept. 2005. The rise was concentrated in the reserves of developing countries that mounted by SDR 84.6 billion or 4.6% to SDR 1924.0 billion, thereby representing 67.5% of total international reserves at the end of Sept. 2005. Around 61.5% of the rise in the reserves of these countries stemmed from the Asian reserves (except Japan). This was mainly ascribed to the intervention of the central banks of some Asian countries, especially China, in the foreign exchange markets to purchase US dollars in exchange for their local currencies. The measure aimed at holding back the appreciation of their local currencies against the US dollar to bolster the competitiveness of their exports and reduce their imports. Moreover, international reserves of Central and Eastern Europe and the Middle East augmented. This was mainly due to a pickup in their oil export proceeds, fuelled by a 43% rise in world oil prices during the first half of 2005. International reserves of Africa, Latin America and the Caribbean also showed an increase.

The reserves of industrial countries declined by SDR 12.2 billion or 1.3%.

Around 27.9% of the decline was attributed to the lower USA reserves. Moreover, there was a fall in the international reserves of Canada, the UK and the euro area as a whole. By contrast, international reserves of Japan rose by some SDR 2.3 billion or 0.4%. As such, Japan continued to rank first among the industrial countries in the list of international reserves. Its balance reached SDR 574.0 billion, constituting 62.1% of the industrial countries' reserves and 20.1% of total international reserves at the global level at the end of Sept. 2005.

- 103 -

8- International Economic Cooperation 8/1: International and Regional Meetings

During July/Sept., 2005, a number of international and regional meetings

were held, the most important of which were as follows:

G8 Summit Meeting The G8 leaders held their meetings during 6-8 July 2005 in Scotland. They

decided to boost their official development assistance for heavily indebted poor countries (HIPC) by US$ 50 billion by 2010, and specifically aid to Africa by US$ 25 billion for purpose of mitigating poverty. They also pledged to provide substantial extra resources for countries which have strong national development plans and are committed to good governance, democracy and transparency. Moreover, the G8 leaders decided to cancel debt of US$ 40 billion owed by 18 HIPC (14 in Africa) to the World Bank, the IMF, and the African Development Bank. They also agreed to grant US$ 3 billion to the Palestinian Authority to support the infrastructure development.

Meeting of The Association of African Central Banks (AACB)

The 29th ordinary meeting of the Assembly of Governors of the Association of African Central Banks (AACB) was held on 29 July 2005 in Accra, Ghana. In this meeting, member central banks were urged to regularly provide their contributions to the Association. It was also recommended that all co-chairs of the AACB sub-regions prepare progress reports on the implementation of the African Monetary Cooperation Programme (AMCP). In addition, the Secretariat of the Association should provide information on the sub-regions that do not have authorities responsible for preparing such reports. Moreover, Governors agreed to set up an African expert working group on payment systems. They also agreed that the theme for the 2006 symposium would be ‘Domestic Capital Markets and Mobilization of Resources for Growth and Poverty Reduction.’

- 104 -

Meeting of the Council of Governors of Arab Central Banks and Monetary Agencies

The Council of Governors of Arab Central Banks and Monetary Agencies

held its 29th annual meeting on 5 Sept. 2005 in Beirut. During the meeting, Governors approved the recommendations of the Arab Committee on Banking Supervision (ACBS). These recommendations were submitted in two papers on “Monitoring Compliance with the Laws and Operations in Banks” and “Regulations of the Outsourcing of Banking Institutions”. Moreover, the report and recommendations of the first institutional meeting of the Arab Committee on Payment and Settlement Systems were approved. A working paper on the Project of Developing the Clearing and Settlement Systems for Payments and Securities in the Arab Countries – to be officially launched in Cairo in Oct. 2005 - was also reviewed.

In discussing the issues proposed for the Joint Arab Speech Statement of

2005, a focus was made on the IMF’s mechanism for promoting the international financial stability. Governors also called for exerting efforts to meet the growing world demand on crude oil and to increase its supply. Moreover, Governors expressed their firm support to the internationally agreed strategies, to determine a framework for combating poverty and to achieve the Millennium Development Goals (MDGs), while increasing the participation of developing countries in the decision making process in international financial organizations.

Annual Meetings of The IMF and The World Bank

The annual meetings of the IMF and the World Bank were held on 24 -25

Sept. 2005 in Washington, D.C. The following is a brief of the communiqués issued during these meetings:

- 105 -

IMFC Communiqué

- The Committee welcomed the ongoing global economic expansion, although it noted that growth divergences between countries remained wide; and that downside risks to the outlook have increased, especially high and volatile oil prices, in addition to the widening of global imbalances. The Committee noted that these areas should be a particular focus of IMF surveillance. The IMF should also stand ready to provide assistance to help members, especially poor countries, deal with oil price shocks.

- The Committee urged for achieving greater exchange rate flexibility in emerging Asia, further structural reforms to boost potential growth in the euro area, and further structural reforms, including fiscal consolidation in Japan.

- The Committee welcomed and supported the broad priorities of the Fund’s Medium-Term Strategy to improve the IMF’s effectiveness in support of its members to meet the challenges of globalization.

- The year 2005 is the International Year of Microcredit. The Committee referred to the IMF’s role in improving data availability on microcredit and in addressing microcredit issues in the Financial Sector Assessment Program.

- The Committee welcomed the rapid progress on the inclusion of collective action clauses in international sovereign bonds, and the efforts by emerging market issuers and private sector creditors to broaden the consensus on the “Principles for Stable Capital Flows and Fair Debt Restructuring in Emerging Markets.”

- The Committee recommended members’ acceptance of the Fourth Amendment of the Articles of the IMF’s Agreement and noted that the Thirteenth General Review of Quotas presented an opportunity to address the issues related to the distribution of quotas and the full participation of all members.

- 106 -

G24 Communiqué

- The Group called on the IMF, the World Bank and the international community to support the urgent needs for the reconstruction and development of Gaza, West Bank, Iraq, and Afghanistan.

- The G24 noted the slow progress made toward achieving the Millennium Development Goals (MDGs) by 2015; stressed the urgent need for increasing aids and finance for low-income countries; and welcomed the establishment of the new financing mechanisms, such as the International Finance Facility (IFF). The IFF started its operations by financing the projects of providing serums, and vaccines for epidemic diseases. Moreover, the Group commended the progress achieved concerning the world tax facility which derives its resources from fees imposed on flight tickets. This facility was applied optionally in some countries.

- The Group pointed out that the IMF’s external communications strategy should observe the member states sovereignty, and avoid any violations of such sovereignty. The G24 leaders emphasized the necessity of obtaining the approval of the concerned authorities in case the Fund expands dialogue and consultations on the policies applicable in member countries.

- The G24 welcomed the IMF’s efforts to improve its response to the requests of low- income countries through creating a new window in the Poverty Reduction and Growth Facility (PRGF) Trust to provide financial support to the PRGF countries facing exogenous shocks, and completing these efforts by activating the CFF to help mitigate the shocks resulting from higher oil prices.

- The Group emphasized the need for achieving progress on the multilateral trade negotiations, and called for adjusting the positions of the emerging market countries, countries in economic transition, and other developing countries concerning voting and representation in Bretton Woods institutions. The G24 also noted that a new quota formula is needed to reflect more accurately the relative economic size of developing countries in the world economy and recommended that these countries hold more positions, including senior positions, at the IMF and World Bank.

- 107 -

8/2: IMF Activity during 2004/2005

IMF Surveillance

The IMF’s Executive Board completed its consultations with 130 individual member countries during the reporting year, in the context of Article IV consultations. For this purpose, the Fund sends missions to each individual country to review its reform policies, provide policy advice, and submit the findings of reviews to the country concerned. The IMF Executive Board also agreed that Article IV consultations are more explicit in linking the country’s economic performance to global economic and financial conditions, to enhance the Fund’s identification and analysis of weaknesses in the countries that are more vulnerable to global economic and financial risks.

IMF Financial Activities and Operations

The following are the main arrangements and facilities approved by the IMF

in the year under review:

1- Stand- By and Extended Arrangements

The bulk of IMF financing is provided under stand-by arrangements, which address members’ short-term balance of payments difficulties, and under the Extended Fund Facility (EFF), which focuses on external payments difficulties arising from longer-term structural problems. During FY 2004/2005, the Fund approved six new stand-by arrangements totaling SDR 1.24 billion. Moreover, it provided two extensions of an existing stand-by arrangement previously granted to Bolivia in an amount of SDR 85.8 million. As such, total stand-by arrangements extended by the IMF during the said year amounted to SDR 1.33 billion, compared with the unprecedented level of SDR 14.5 billion during the pervious FY. This reflected an improvement in the financing conditions of emerging market sovereign debts. Of the total arrangements extended during FY 2004/2005, the Dominican Republic accounted for SDR 437.8 million or 33% to support the economic program of the government.

- 108 -

As for Extended Fund Facilities (EFF), no commitments were made under

this facility during FY 2004/2005.

2- Special Facilities and Arrangements:

No commitments were made under the IMF’s Compensatory Financing Facility (CFF) during 2004/2005. As for the Emergency Post-Conflict Assistance (EPCA), the Fund provided SDR 312.9 million to Central African Republic, Haiti and Iraq. In addition, the IMF extended SDR 110.4 million under the Emergency Natural Disaster Assistance (ENDA) to Grenada, Maldives and Sri Lanka. As for the subsidization of emergency assistance, 14 member countries have pledged bilateral contributions totaling SDR 35.1 million.

3- Poverty Reduction and Growth Facility

Eight new PRGF arrangements were approved during FY 2004/2005 (for Chad, the Republic of Congo, Georgia, the Kyrgyz Republic, Mali, Mozambique, Niger, and Zambia), with commitments totaling SDR 434.4 million. In addition, the Board approved augmentations of the existing arrangements for Bangladesh and Kenya in the amount of SDR 53.3 million and SDR 50 million, respectively. Total PRGF disbursements amounted to SDR 0.8 billion during the said year.

HIPC Initiative

The number of countries eligible for the enhanced initiative and the original

initiative reached 28. In the meantime, grants extended by the Fund under this initiative totaled SDR 1.8 billion, while total disbursements reached SDR 1.5 billion at end of April 2005.

- 109 -

IMF Quotas

By April 30, 2005, most member countries had paid for their proposed quota increases under the Eleventh General Review of Quotas, However, three member countries were an exception as they were ineligible to consent to the proposed quota increases because of their arrears to the IMF. In addition, the Twelfth General Review of Quotas was completed without proposing an increase or adjustment. Accordingly, total quotas amounted to SDR 213.5 billion.

Purchase and Repurchase Operations

Total purchases (disbursements) by 46 countries, under the regular and concessional lending reached SDR 2.4 billion. Turkey and Uruguay accounted for SDR 454 million and SDR 419 million, respectively. On the other hand, total repurchases (repayments) totaled SDR 14.8 billion. Turkey, Russia, Brazil, and Argentina repurchased SDR 10.86 billion or 73.3% of the total. Accordingly, IMF outstanding credit under the aforementioned lending operations amounted to SDR 56.6 billion.

IMF Resources and Liquidity

The Fund’s liquidity reached SDR 94.3 billion at end of April 2005, against

SDR 58.1 billion on 30 April 2004). Moreover, the currency base for conducting the IMF’s financial transactions was expanded to include the Russian currency.

IMF Membership

The number of the IMF’s member countries remained unchanged at 184. It is noteworthy that the Democratic Republic of Timor-L'este (formerly, East Timor) was the last country that have joined the IMF, with a quota of SDR 8.2 million.

Annex

- 111 -

Annex Statistical Section

1- Monetary and Banking Developments

Monetary Aggregates

(1/1/1) CBE Financial Position: Reserve Money and Counterpart Assets (1/1/2) Banking Survey: Domestic Liquidity and Counterpart Assets (1/1/3) Banking Survey: Deposits in Local Currency (1/1/4) Banking Survey: Deposits in Foreign Currencies (1/1/5) Banking Survey: Foreign Assets and Liabilities (1/1/6) Banking Survey: Domestic Credit and Other Items (Net) (1/1/7) Total Saving Vessels (1/1/8) Bank Lending and Discount Balances to Business Sector

Financial Sector - Structure of the Egyptian Banking System as at 30/9/2005 - Authorized and Operating Exchange Dealer Companies up to 30/9/2005 - Mutual Funds Licensed and Operating up to 30/9/2005 Activity of the Banking System

Central Bank of Egypt

(1/2/1) Note Issued Including Cash in CBE Vault by Denomination (1/2/2) Currency in Circulation Outside CBE by Denomination (1/2/3) Clearing House Activities

- 112 -

Banks

(1/3/1) Aggregate Financial Position (1/3/2) Deposits by Maturity and Saving Systems (1/3/3) Non-Government Deposits in Local Currency by Maturity (1/3/4) Deposits by Sector (1/3/5) Deposits by Economic Activity (1/3/6) Portfolio Investments by Sector (1/3/7) Lending and Discount Balances by Sector (1/3/8) Credit by Sector (1/3/9) Lending and Discount Balances by Economic Activity (1/3/10) Loans and Advances (Excluding Discount Balances) by Maturity and

Type of Guarantee

Interest Rate

(1/4) The Discount Rate and Interest Rates on Deposits and Loans in Egyptian

Pound (1/5) Domestic Interest Rates on Deposits in Major Currencies (1/6) The Interest Rates on Treasury Bills (Weekly Weighted Averages) Index Number

(1/7) Wholesale Price Index (1/8) Consumer Price Index (Urban Population) (1/9) Consumer Price Index (Rural Population) (1/10) Consumer Price Index (Total Population)

- 113 - 2- The Stock Exchange

(2/1) Companies Listed on the Stock Exchange (2/2) Transactions on Shares on the Stock Exchange (2/3) Transactions on Bonds & Mutual Funds Documents on the Stock

Exchange (2/4) Global Depository Receipts (GDR’s) (2/5) The Outstanding Balance of Treasury Bills (Quarterly) (2/6) The Outstanding Balance of Treasury Bills (Weekly) (2/7) The Outstanding Balance of Treasury Bonds 3- Public Finance & Domestic Public Debt

(3/1) Consolidated Fiscal Operations of General Government (Total Expenditures) (3/2) Consolidated Fiscal Operations of General Government (Total Revenues) (3/3) Summary of the Consolidated Fiscal Operations of General

Government (3/4) Domestic Debt of Government & Public Economic Authorities (3/5) National Investment Bank (Resources & Uses) 4- External Transactions

(4/1) Balance of Payments (LE) (4/2) Balance of Payments (US$) (4/3) Exports by Degree of Processing (US$ mn) (4/4) Imports by Degree of Use (US$ mn) (4/5) Regional Distribution of Export and Import Transactions (4/6) LE Average Exchange Rates against Foreign Currencies (4/7) External Debt

- 114 -

5- Cotton

(5/1) Position of Egyptian Cotton 6- Tourism

(6/1) Number of Arrivals and Tourist Nights of Departures (by Group) (6/2) Number of Tourists (Departures) & Average Stay

2004 2005End of Sept. June Sept. June Sept. June Sept.

Reserve Money 77019 89236 102859 118504 127432 177822 151414 Currency in circulation Outside CBE 47222 51960 54339 59415 61208 67241 70133 Bank deposits in local currency 29797 37276 48520 59089 66224 110581 81281

Counterpart Assets 77019 89236 102859 118504 127432 177822 151414 Net foreign Assets 10533 12343 11270 9858 10139 37295 49049 Foreign Assets 61483 86287 86757 88313 88198 108738 118635 Gold 2568 3808 3808 4437 4437 4500 4500 Foreign securities 13668 15569 16387 17103 18176 16665 16035 Foreign currencies 45247 66910 66562 66773 65585 87573 98100 Foreign Liabilities 50950 73944 75487 78455 78059 71443 69586 Net Domestic Assets 66486 76893 91589 108646 117293 140527 102365 Net claims on Government 77225 70769 85599 99472 107114 122264 102168 Claims; of which 123563 136723 149782 181313 210472 227367 179143 Government securities 98512 116527 116577 164441 194441 208021 164907 Deposits 46338 65954 64183 81841 103358 105103 76975 Net Claims on Banks -19099 -34505 -35688 -35544 -36339 -21983 -8077 Claims 8911 9766 8758 9530 9227 11572 17000 Deposits in foreign currencies 28010 44271 44446 45074 45566 33555 25077 Other items (net) 8360 40629 41678 44718 46518 40246 8274 Assets 17906 48758 51188 54355 58844 49071 48015 Liabilities ;of which 9546 8129 9510 9637 12326 8825 39741 Equities 5500 1501 1790 2325 2325 2331 2513 Provisions 295 235 303 307 375 302 302Source : Central Bank of Egypt

- 115 -

(1/1/1) CBE Financial Position : Reserve Money & Counterpart Assets ( LE mn )

20032002


First : Domestic Liquidity 338156 384262 401009 434911 450914 493884 514822

a - Money Supply 61608 67212 71222 77606 80660 89685 99928

Currency in circulation outside the banking system 44197 48258 51005 55933 57666 63029 66335

Demand deposits in local currency 17411 18954 20217 21673 22994 26656 33593

b - Quasi-Money 276548 317050 329787 357305 370254 404199 414894

Time & saving deposits in local currency 197214 212010 217410 233610 241579 283020 290467

Demand and time & saving deposits in foreign currencies 79334 105040 112377 123695 128675 121179 124427

Second : Counterpart Assets

Net foreign assets 20176 25429 31946 45241 53021 80913 103913

Domestic credit 372697 387446 400227 422040 432009 466771 470017

Other items (net) -54717 -28613 -31164 -32370 -34116 -53800 -59108

Source : Central Bank of Egypt

- 116 -( 1/1/2 ) Banking Survey : Domestic Liquidity and Counterpart Assets

( LE mn )20032002


Total Deposits in local Currency 214625 230964 237627 255283 264573 309676 324060

First : Demand Deposits 17411 18954 20217 21673 22994 26656 33593

Public business sector * 1865 2937 2269 2857 2137 3027 3162

Private business sector 7328 7989 8671 9235 9806 12228 18022

Household sector 8690 8674 9754 10306 11538 11985 13214

Minus: Purchased cheques & drafts 472 646 477 725 487 584 805

Second : Time and Saving Deposits 197214 212010 217410 233610 241579 283020 290467





* Including all public business sector companies subject or not to Law No 203 for 1991.

- 117 -( LE mn )

( 1/1/3 ) Banking Survey : Deposits in Local Currency

20032002


Total Deposits in Foreign Currencies 79334 105040 112377 123695 128675 121179 124427

First : Demand Deposits 9097 12159 14041 16280 17303 18140 19125




Minus: Purchased cheques & drafts 412 128 193 186 149 166 160

Second : Time and Saving Deposits 70237 92881 98336 107415 111372 103039 105302





* Including all public business sector companies subject or not to Law No 203 for 1991.

- 118 -( LE mn )

( 1/1/4 ) Banking Survey : Deposits in Foreign Currencies

20032002


Net Foreign Assets 20176 25429 31946 45241 53021 80913 103913

First : Foreign Assets With 91338 126067 131539 145297 151064 174328 192803

Central Bank of Egypt 61483 86287 86757 88313 88198 108737 118636

Banks 29855 39780 44782 56984 62866 65591 74167

Second : Foreign Liabilities With 71162 100638 99593 100056 98043 93415 88890

Central Bank of Egypt 50950 73944 75487 78455 78059 71443 69586

Banks 20212 26694 24106 21601 19984 21972 19304


- 119 -( 1/1/5 ) Banking Survey : Foreign Assets and Liabilities

( LE mn )20032002


First : Domestic Credit 372697 387446 400227 422040 432009 466771 470017

Claims on the government (A+B-C) 106096 103518 113492 126343 135693 159889 157095

A-Securities 170461 203845 204929 258178 293876 311376 283492

B-Credit facilities 39585 33506 46672 33094 32122 41385 36537

C-Government deposits 103950 133833 138109 164929 190305 192872 162934

Claims on public business sector * 31985 34986 35369 35588 36540 37421 38253

Claims on private business sector 200397 214308 215912 223096 221434 228195 231589

Claims on household sector 34219 34634 35454 37013 38342 41266 43080

Second : Other Items (Net) -54717 -28613 -31164 -32370 -34116 -53800 -59108

Capital accounts of which : -71118 -76905 -80964 -83821 -88591 -94179 -99152

Capital and reserves -29381 -31750 -32004 -33836 34082 -37699 -39098

Provisions -36348 -40334 -42509 -44891 47223 -49843 -50628

Net unclassified assets and liabilities 16401 48292 49800 51451 54475 40379 40044


* Including all public business sector companies subject or not to Law No 203 for 1991 .

- 120 -( LE mn )

( 1/1/6 ) Banking Survey : Domestic Credit and Other Items (Net)

20032002


Total Saving Vessels 345314 395068 409106 445887 459431 498190 509068

Savings With the Banking System 276548 317050 329787 357305 370255 404199 414894

Time & saving deposits in local currency 197214 212010 217410 233610 241579 283020 290467

Demand and times & saving deposits in foreign currencies 79334 105040 112377 123695 128676 121179 124427

Net Sales of Investment Certificates 50552 55218 56014 60178 60300 58485 58493

Post Office Saving Deposits 18214 22800 23305 28404 28876 35506 35681


- 121 -

( LE mn )(1/1/7) Total Saving Vessels

20032002


Total 31841 34885 35231 35430 36357 37242 38073

In Local Currency 26853 26834 26814 27690 28591 30165 31498

Agriculture 57 55 49 44 35 16 7

Industry 16227 16854 16859 17263 17864 18318 18754

Trade 5465 5094 4967 5272 5420 5936 6036

Services 5104 4831 4939 5111 5272 5895 6701

In Foreign Currencies 4988 8051 8417 7740 7766 7077 6575

Agriculture - - - - - - -

Industry 4450 5614 5834 5603 5788 5260 4983

Trade 330 446 460 532 530 511 514

Services 208 1991 2123 1605 1448 1306 1078


* Including all public business sector companies subject or not to Law No 203 for 1991 .

(1/1/8) Bank Lending and Discount Balances to Business SectorPublic Business sector*

( LE mn ) - 122 -

20032002


Total 185051 199896 201197 205816 204601 205693 204465


Agriculture 4941 4444 4529 4972 4580 5756 5627

Industry 54211 55775 54653 58434 60268 59099 57776

Trade 42461 42436 42625 42267 40144 39712 38476

Services 43177 46413 47553 48474 47707 47624 47361


Agriculture 536 447 471 550 546 619 874

Industry 15266 19764 19674 19850 19758 20388 20720

Trade 8765 11111 11648 12020 12638 11369 11564

Services 15694 19506 20044 19249 18960 21126 22067


(1/1/8) Bank Lending and Discount Balances to Business SectorPrivate Business Sector (contd.)

( LE mn ) - 123 -

20032002

4Public Sector Banks

959BranchesCommercial Banks

22Private & Joint Venture Banks

435Branches

11Private & Joint Venture Banks

201BranchesBusiness&Investment Banks

17Off-Shore Banks

59Branches

Specialized Banks

1Industrial Development Bank of Egypt

13Branches

1 Egyptian Arab Land Bank**

28Branches

1 Principal Bank for Development &Agricultural Credit.

1210Branchesof whic : Agricultural Banks in

Governorates 2 Village Banks 1037

290557Total

* Excluding the branches of Egyptian banks abroad and two banks established under private laws and not registered with CBE ( the Arab International Bank ,and Nasser Social Bank ) ** The Credit Foncier Egyptien had been merged in the Arab Land Bank on 21/6/1999 .

Real Estate

Industrial

Agricultural

- 124 -

STRUCTURE OF THE EGYPTIAN BANKING SYSTEM AS AT 30/9/2005*

Central Bank of Egypt

Main offices Branches Total paid up capital (LE mn)

Total 100 147 296.1Cairo 33 36 170.6Alexandria 12 10 20.0Port-Said 10 8 10.1Suez 1 1 1.0Ismailia 0 1 0.0Behera 1 2 1.0Damietta 1 0 1.0Kafr El-Sheikh 0 5 0.0Gharbia 3 8 5.0Dakahalia 5 11 5.1Sharkia 4 13 4.4Menoufia 3 3 4.0Kalyoubia 3 1 3.0Bany- sweef 1 2 1.0Giza 17 15 49.9Fayium 0 3 0.0Menia 0 4 0.0Assiut 1 4 1.0Sohag 0 4 0.0Kena 1 3 10.0Asswan 0 3 0.0Marsa Matrouh 0 0 1.0North Sinai 1 1 1.0South Sinai 1 0 6.0Red Sea 2 6 1.0Luxor 0 3 0.0 Source : Central Bank of Egypt

Authorized and Operating Exchange Dealer Companies up to 30/9/2005

- 125 -

Cash Total

distributions till 30/9/2005

(LE)

at 30/9/2005at issue

Open-end Funds

-734.58100200Nov-95GrowthI Banque Du Caire

22.50126.79100300Apr-97Income / Growth

II American Express Bank/Second**

62.00316.79100100May-97Income / GrowthIII Egyptian Gulf Bank

101.75271.51100300Oct-94GrowthIV Egyptian American Bank

111.50356.14100200Nov-94GrowthV Bank of Alexandria

7.00142.0610050Dec-04IncomeVI Faisal Islamic Bank of Egypt

33.00234.50100100Oct-96Income Export Development Bank of Egypt

Cairo F. Management

192.00630.15500100Aug-95GrowthI Arab Misr Insurance Group

270.001985.95500100Jun-96GrowthII Societe Arabe Int'l de Banque / First

64.00245.40100200Oct-97Income / Growth

III Societe Arabe Int'l de Banque/Second

57.00103.3010050Feb-99IncomeIV Societe Arabe Int'l de Banque / third

80.3098.18100500Feb-95IncomeI Banque Misr / First34.1570.2866.67300Sep-95GrowthII Banque Misr / Second 31.00185.87100280Feb-98GrowthIII Misr Interntional Bank

250.003668.891000138.97Dec-97Income / GrowthI Banque Misr / Third*

35.00365.85100100Aug-98Income / Growth

II Misr Iran Development Bank/First

-1018.061000500Jul-05IncomeIII Misr Iran Development Bank / Second

-105.15100200Aug-05Income / Growth

IV National Bank of Egypt / Third

593.371076.161000150Jun-99IncomeEgyptian American Bank / Third**

Lazard Asset Management

Egypt

20.00361.22500100Dec-96Income / GrowthSuez Canal BankEgyptian Anglo

F. Management

-1592.00500200Sep-94GrowthI National Bank of Egypt / First

96.7587.50100300Oct-95IncomeII National Bank of Egypt / Second

-105.721001000Apr-05IncomeCIBCIH Management

Close-end Funds

-1212.86100050Feb-97GrowthOrient TrustEgyptian

Investment &Finance Co.

113.751023.80100070Feb-00Income Arab Land Direct Prime Investment F. Managementsource : Monthly Bulletin of Cairo & Alexandria Stock Exchanges.* The fund of Misr Exterior Bank was renamed the third fund of Banque Misr as of 16/9/2004 after merging Misr Exterior Bank into Banque Misr.** The fund of American Express Bank was renamed the fund of the Egyptian American Bank as of 30/6/2005 after merging American Express Bank into the Egyptian American Bank.

Fund managers

Hermes F. Management

Concord F. Management

HC Investment & Securities

El-Ahly F. Management

- 126 -

Prime Investment F. Management

Up To 30/9/2005 Mutual Funds Licensed and Operating

The fund capital LE

mnFund Name

The Price of Document

Inception Date

Type of fund


Currency By Denomination 47490 52219 54673 59703 61737 67527 70992

PT 25 124 136 122 118 105 120 119

PT 50 216 235 206 203 192 220 219

LE 1 407 455 424 515 486 517 502

LE 5 1052 1119 1166 1226 1294 1279 1280

LE 10 5825 5728 5607 5490 5391 5074 4889

LE 20 12052 12110 11934 11010 11459 10329 10087

LE 50 16820 19381 19885 22686 22521 24517 26218

LE 100 10994 13055 15329 18455 20289 25471 27678


- 127 -

(1/2/1) Note Issued Including Cash in CBE Vault by Denomination ( LE mn )

20032002


Total 47216 51960 54339 59415 61209 67236 70132

Subsidiary denominations (banknotes & coins)* 208 213 214 219 221 226 228

PT 25 122 135 121 117 103 118 113

PT 50 211 232 203 201 184 217 209

LE 1 397 448 418 510 473 512 483

LE 5 1032 1098 1141 1201 1250 1251 1149

LE 10 5766 5690 5558 5424 5344 4999 4646

LE 20 11957 12049 11825 10926 11275 10246 9843

LE 50 16621 19270 19658 22490 22338 24348 26003

LE 100 10902 12825 15201 18327 20021 25319 27458


* Issued by the Ministry of Finance

- 128 -(1/2/2) Currency in Circulation outside CBE by Denomination

( LE mn )20032002

During 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2004/2005 2005/2006

Cairo Branch

Number of cheques (thousands) 6881 6737 9250 8856 8618 2054 2121

Value of cheques (LEmn) 249613 232323 215703 215091 231942 55200 62526

Alexandria Branch



Port - Said Branch



All Branches




( 1/2/3) Central Bank of Egypt : Clearing House Activities - 129 -

July / Sept.

2002 2003 2004 2005End of Sept. June Sept. June Sept. June Sept.

A - Assets

Cash 4335 5557 5081 5412 5653 6594 6026

Securities & investments in TBs, 95751 111337 113644 137431 155564 172177 183800

Balances with banks in Egypt 85079 110874 122749 116290 107863 124986 125389

Balances with banks abroad 21585 29798 33880 43290 49344 51204 59657

Loans and discounts 267846 284722 287354 296199 297112 308195 309843

Other assets 41457 35650 43055 34814 47215 41990 59090

Assets = Liabilities 516053 577938 605763 633436 662751 705146 743805

B - Liabilities

Capital 12810 18155 18724 20346 20895 22949 24444

Reserves 11070 11805 11490 11454 10861 12419 12141

Provisions 36053 40099 42206 44584 46848 49541 50326

Long - term loans & bonds 14218 14866 15424 15012 14231 14255 14928

Obligations to banks in Egypt 36353 35579 32749 29933 27978 22671 30838

Obligations to banks abroad 10813 16247 13351 10332 9394 12262 9814

Total deposits 350927 403144 422786 461697 479487 519649 534810

Other liabilities 43809 38043 49033 40078 53057 51400 66504


- 130 -(1/3/1) Banks : Aggregate Financial Position

( LE mn )


Total Deposits 350927 403144 422786 461697 479487 519649 534810

Demand deposits 31565 37233 40392 46742 46939 51557 59984

Time & Saving deposits and saving accounts 297340 342535 357257 389482 406272 445132 452692

Blocked or retained deposits 22022 23376 25137 25473 26276 22960 22134

First : Local Currency Deposits 256523 278179 288932 310870 323342 369067 382944

Demand deposits 20752 22929 23987 27168 27664 31606 39034

Time & Saving deposits & saving accounts 221298 242058 250810 269505 281508 324664 331586


Second : Foreign Currency Deposits 94404 124965 133854 150827 156145 150582 151866

Demand deposits 10813 14304 16405 19574 19275 19951 20950

Time & Saving deposits and saving accounts 76042 100477 106447 119977 124764 120468 121106



- 131 -(1/3/2) Banks : Deposits by Maturity

( LE mn )


Total (1+2) 204167 224419 231018 247385 255926 298306 3136551-Total Deposits 173575 177721 181803 193933 190322 202582 211476

First: Demand Deposits 19239 20970 22045 25053 25540 28445 35894A -Free 16667 18669 19454 21259 22434 26012 33238B- Blocked 2572 2301 2591 3794 3106 2433 2656

Second: Time and Saving Deposits 154336 156751 159758 168880 164782 174137 175582A -Free During one month 17328 14904 17424 16966 16748 16134 16909 From 1 to 3 months 33612 28998 30525 27494 26049 25577 26724 From 3 to 6 months 11689 12211 11140 11277 12425 11262 11762 From 6 to one year 4698 4098 4232 5091 4926 6660 6613 After one year 3661 2444 2462 2150 1884 1718 1659B- Blocked 9819 8039 8368 7738 8648 8096 7736C- Saving Accounts 72278 83572 82943 95780 93112 102817 101615D- Others 1251 2485 2664 2384 990 1873 2564

2-Saving Systems 30592 46698 49215 53452 65604 95724 102179 Less than three years 8181 7816 9299 7825 7678 7348 7069 Three years and more 22411 38882 39916 45627 57926 88376 95110Source : Central Bank of Egypt

* Excluding specialized banks.

- 132 -

(1/3/3) Banks * : Non- Government Deposits & Saving Systems in Local Currency ( by Maturity )

( LE mn )


Total Deposits 350927 403144 422786 461697 479487 519649 534810

Local Currency Deposits 256523 278179 288932 310870 323342 369067 382944

Government sector 41143 46071 50509 54120 57667 57649 56693




Foreign sector ** 308 498 319 742 614 1158 1386

Foreign Currency Deposits 94404 124965 133854 150827 156145 150582 151866





Foreign sector** 932 820 822 759 773 1985 993


* Including all public sector companies subject or not to Law No 203 for 1991 .

** Including counterpart deposits of US aid .

(1/3/4) Banks : Deposits by Sector( LE mn )

- 133 -


Total Deposits 350927 403144 422786 461697 479487 519649 534810

Local Currency Deposits 256523 278179 288932 310870 323342 369067 382944

Agriculture 2281 2049 2456 2480 2789 2548 2427

Industry 14657 15054 15557 17325 18061 19239 20590

Trade 10706 9879 11598 10520 11019 11740 12746

Services 20907 22416 23886 28487 29318 31915 37751

Unclassified sectors 207972 228781 235435 252058 262155 303625 309430

Foreign Currency Deposits 94404 124965 133854 150827 156145 150582 151866

Agriculture 420 558 514 467 455 831 847

Industry 9739 12193 13673 14718 15771 15274 17167

Trade 5718 5914 6304 7258 7830 6583 6668

Services 10045 12772 13273 15306 16194 17499 18110



- 134 -(1/3/5) Banks : Deposits by Economic Activity

( LE mn )


Total 95751 111337 113644 124099 128900 139062 183800





Household sector - - - - - - -

Foreign sector - - - - - - -



Public business sector * 3 - - - - - -


Household sector - - - - - - -

Foreign sector 4805 6169 7183 10042 9693 10032 10343



(1/3/6) Banks : Portfolio Investments by Sector( LE mn )

- 135 -


Total 267847 284722 287354 296199 297112 308195 309843






Foreign sector 644 409 347 389 413 492 556






Foreign sector 1511 1550 1625 1333 1307 1481 1382



- 136 -(1/3/7) Banks : Lending and Discount Balances by Sector

( LE mn )


Total 363598 396059 400998 420298 426012 447257 493643






Foreign sector 644 409 347 389 413 492 556






Foreign sector 6316 7719 8808 11375 11000 11513 11725



(1/3/8) Banks : Credit by Sector( LE mn )

- 137 -


Total 267847 284722 287354 296199 297112 308195 309843


Agriculture 5025 4521 4601 5015 4662 5822 5686

Industry 72080 74269 73151 77722 80636 81844 81183

Trade 47926 47530 47592 48479 45564 45648 44512

Services 56061 58547 59776 60505 59987 59870 59930



Agriculture 536 447 471 550 546 619 874

Industry 20963 26782 27091 28569 28563 34957 35582

Trade 9096 11557 12108 12552 13169 11893 12093

Services 19585 24341 25010 23941 23759 24188 24824



( LE mn )(1/3/9) Banks : Lending and Discount Balances by Economic Activity

- 138 -

2003 2004 2005End of Sept. June Sept. June Sept. June Sept.

Total 236145 252429 254242 262261 262867 272063 274089

Up to One Year Maturity 151982 156122 156691 170105 169753 169811 170554

With in kind guarantees 50074 48893 47982 52834 51424 51793 48193

Without in kind guarantees 101908 107229 108709 117271 118329 118018 122361

More than One Year Maturity 84163 96307 97551 92156 93114 102252 103535

With real estate mortgages 15573 11332 11513 10303 10224 11332 10846

With other guarantees 68590 84975 86038 81853 82890 90920 92689


* Excluding specialized banks.

(Excluding Discount Balances) by Maturity and Type of Guarantee( LE mn )

(1/3/10) Banks* : Loans and Advances - 139 -

2002

in Egyptian Pound(% Annually)

Average Interest Rate in Banks

Interest Rate on Investment Certificates

Interest Rate on Post Office

on three month

deposits

on one year-or less

maturity loans

Simple Interst

Compound Interest

Saving Deposits*

January 2003 10.00 8.27 13.80 10.50 10.00 10.50February 10.00 8.03 13.78 ,, ,, ,,March 10.00 8.12 13.39 ,, ,, ,,April 10.00 8.27 13.58 ,, ,, ,,May 10.00 8.36 13.53 ,, ,, ,,June 10.00 8.46 13.45 ,, ,, ,,July 10.00 8.37 13.38 ,, ,, ,,August 10.00 8.37 13.42 ,, ,, ,,September 10.00 8.27 13.57 ,, ,, ,,October 10.00 8.11 13.55 ,, ,, ,,November 10.00 8.07 13.58 ,, ,, ,,December 10.00 7.92 13.42 ,, ,, ,,

January 2004 10.00 7.88 13.37 ,, ,, ,,February 10.00 7.80 13.42 ,, ,, ,,March 10.00 7.68 13.25 ,, ,, ,,April 10.00 7.67 13.31 ,, ,, ,,May 10.00 7.68 13.31 ,, ,, ,,June 10.00 7.68 13.27 ,, ,, ,,July 10.00 7.71 13.41 ,, ,, ,,August 10.00 7.71 13.47 ,, ,, ,,September 10.00 7.70 13.45 ,, ,, ,,October 10.00 7.70 13.42 ,, ,, ,,November 10.00 7.70 13.33 ,, ,, ,,December 10.00 7.68 13.34 ,, ,, ,,

January 2005 10.00 7.63 13.36 ,, ,, ,,February 10.00 7.62 13.44 ,, ,, ,,March 10.00 7.60 13.41 ,, ,, ,,April 10.00 7.60 13.39 ,, ,, ,,May 10.00 7.60 13.35 ,, ,, ,,June 10.00 7.61 13.35 ,, ,, ,,July 10.00 7.46 13.31 ,, ,, ,,August 10.00 7.42 13.28 ,, ,, ,,September 10.00 6.60 12.80 ,, ,, ,,Source: Central Bank of Egypt, Egyptian National Postal Authority. * Calculated as additional interest of 0.25% for deposits of one year maturity

(1/4 ) The Discount and Interest Rates on Deposits and Loans

End of Discount rate

- 140 -

US Dollar Sterling PoundMin. Max. Min. Max. Min. Max.

January 2003 1.06 1.25 2.88 3.63 2.06 2.31February 1.00 1.19 2.56 3.31 1.81 2.06March 1.00 1.19 2.56 3.31 1.75 2.00April 1.00 1.19 2.50 3.25 1.81 2.06May 1.00 1.19 2.50 3.25 1.81 2.06June 0.69 0.88 2.50 3.25 1.38 1.63July 0.81 1.00 2.31 3.06 1.38 1.63August 0.81 1.00 2.44 3.19 1.38 1.63September 0.81 1.00 2.56 3.31 1.38 1.63October 0.88 1.06 2.81 3.56 1.38 1.63November 0.88 1.06 2.88 3.63 1.38 1.63December 0.88 1.06 2.94 3.69 1.38 1.63

January 2004 0.81 1.00 3.00 3.75 1.31 1.56February 0.81 1.00 3.06 3.81 1.31 1.56March 0.81 1.00 3.19 3.94 1.25 1.50April 0.81 1.00 3.25 4.00 1.31 1.56May 1.00 1.19 3.50 4.25 1.31 1.56June 1.25 1.44 3.69 4.44 1.38 1.63July 1.38 1.56 3.81 4.56 1.38 1.63August 1.44 1.63 3.81 4.56 1.38 1.63September 1.69 1.88 3.81 4.56 1.38 1.63October 1.81 2.00 3.75 4.50 1.38 1.63November 2.06 2.25 3.75 4.50 1.44 1.69December 2.15 2.44 3.75 4.50 1.44 1.69

January 2005 2.38 2.56 3.75 4.50 1.38 1.63February 2.56 2.75 3.75 4.50 1.38 1.63March 2.75 2.94 3.88 4.63 1.38 1.63April 2.88 3.06 3.81 4.56 1.38 1.63May 3.00 3.19 3.75 4.50 1.38 1.63June 3.19 3.38 3.69 4.44 1.38 1.63July 3.38 3.56 3.50 4.25 1.38 1.63August 3.50 3.69 3.44 4.19 1.38 1.63September 3.69 3.88 3.50 4.25 1.38 1.63Source: National Bank of Egypt

Euro

- 141 -

(1/5 ) Domestic Interest Rates on 3 Months DepositsMajor Currencies ( % Annually )

End of

(%)

91 days 182 days 364 days

July 2005

The:

First week (7/7) 7.856 7.903 8.390Second (14/7) 8.576 0.0 8.174Third (21/7) 8.971 9.095 8.790 Fourth (28/7) 0.0 9.652 9.393

Month's average 8.468 8.883 8.687

August 2005

The:


(30/8) 9.319 9.581 9.984

Month's average 9.358 9.728 9.956

September 2005

The:


(29/9) 9.187 9.461 9.127

Month's average 9.110 9.209 9.293Source: Central Bank of Egypt.

(1/ 6) Interest Rate on Treasury bills ( Weekly Weighted Average)

- 142 -

Relative 2004 July/Sept . The Year Ending

Weights Sept . June Sept . 2005/2006 Sept. 2005 General Index (All Items) 100.0 159.9 167.5 172.2 2.8 7.7

Farm Products 34.4 185.5 .. 205.7 .. 10.9Food Stuffs 18.2 152.3 .. 166.1 .. 9.1Beverages & Tobacco 2.7 168.2 .. 169.0 .. 0.5Yarn &Textiles 3.9 170.9 .. 170.3 .. -0.3Wearing Apparel 1.4 120.6 .. 124.4 .. 3.2Leather & Footwear 0.2 160.9 .. 167.0 .. 3.8Wood & its Products 1.5 149.9 .. 166.1 .. 10.8Paper & Printing 1.7 152.1 .. 156.1 .. 2.6Chemicals & its products 7.4 116.0 .. 119.7 .. 3.2Fuel & Related Products 10.5 109.5 .. 124.7 .. 13.8Rubber & Plastic Products 0.6 146.4 .. 140.7 .. -3.9Nonmetallic Mineral Products 3.5 122.7 .. 130.8 .. 6.6Metals 5.2 228.4 .. 231.9 .. 1.6Metallic Prods.,Machinery&Equipment 5.4 140.5 .. 146.2 .. 4.0Transportation Equipment 2.8 164.2 .. 156.0 .. -5.0Other Manufacturing Products 0.6 180.4 .. 187.0 .. 3.7

.. Not available.

* A new series was developed by taking the average of the fiscal year 1999/2000 as a base period. The averages of two years (1999/2000 and 2000/2001 ) for agricultural and industrial production values were taken as weights for this series, in order to avoid big and sudden changes which may occur in the production of some commodities in case of selecting one year. This series has been released as of September 2005.

- 143 -

Groups

(1/7) Wholesale Price Index (1999/2000=100)*

2005 Change ( %)

Source : Central Agency for Public Mobilization and Statistics (Monthly Bulletin of Wholesale Price Index released every two months).

2004

End ofRelative Weights

Sept. June Sept. The Year Ending

Sept.2005

July/Sept.2005

General Index 100.0 131.5 135.0 136.4 3.8 1.0Food& non- alcoholic beverages 38.9 146.1 150.7 153.8 5.3 2.1

Tobacco 2.8 136.1 136.1 136.1 0.0 0.0

Clothing & Footwear 10.4 124.5 130.8 130.9 5.2 0.1

Housing , water,elect.,gas& fuel 11.7 109.3 112.4 112.4 2.9 0.0

Furniture, household equipment & maintenance 4.9 131.7 132.5 132.8 0.8 0.2

Health 4.6 118.5 120.3 122.4 3.2 1.7

Transport 5.6 125.1 125.5 126.4 1.0 0.7

Communications 2.0 152.3 180.7 178.7 17.3 -1.1

Recreation & Culture 5.9 119.5 119.5 120.2 0.6 0.6

Education 5.7 119.5 119.5 119.5 0.0 0.0

Hotels & Restaurants 2.5 130.1 130.1 130.1 0.0 0.0

Miscellaneous 5.0 120.2 121.1 121.1 0.7 0.0

Source: Central Agency for Public Mobilization and Statistics (Monthly Bulletin for Consumer Price Index).

(1/8) Consumer Price Index (Urban Population ) (1999/2000=100)- 144 -

Change (%)2005

2004


Sept. July Sept. The Year Ending Sept.2005

Aug./Sept.2005

General Index 100.0 133.9 136.2 137.2 2.4 0.7Food& Non- alcoholic beverages 50.8 146.5 149.0 150.8 2.9 1.2

Tobacco 3.6 132.3 132.3 132.3 0.0 0.0



Furniture, household equipment & maintenance 3.9 122.9 123.3 123.3 0.4 0.0

Health 3.7 118.6 122.7 122.7 3.4 0.0

Transport 2.6 128.1 128.5 128.5 0.3 0.0

Communications 0.4 157.7 191.7 191.7 21.6 0.0

Recreation & Culture 3.3 123.1 124.3 124.3 0.0 0.0

Education 3.4 113.0 113.0 113.0 0.0 0.0


Miscellaneous 3.3 116.2 117.0 117.0 0.8 0.0

Source: Central Agency for Public Mobilization and Statistics (Monthly Bulletin for Consumer Price Index).

(1/9) Consumer Price Index (Rural Population ) (1999/2000=100)

- 145 -2005 Change ( %)

2004


Sept. July Sept. The Year Ending Sept. 2005

Aug./ Sept.2005

General Index 100.0 132.9 135.9 136.8 3.0 0.7Food & Non- alcoholic beverages 44.1 146.3 150.1 152.1 3.9 1.3

Tobacco 3.2 133.9 133.9 133.9 0.0 0.0



Furniture household equipment & maintenance 4.5 126.7 127.4 127.4 0.5 0.0

Health 4.2 118.6 122.6 122.6 3.4 0.0

Transport 4.3 126.8 127.6 127.6 0.6 0.0

Communications 1.3 155.4 186.1 186.1 19.8 0.0

Recreation &Culture 4.7 121.6 122.6 122.6 0.8 0.0

Education 4.8 115.8 115.8 115.8 0.0 0.0


Miscellaneous 4.2 117.9 118.8 118.8 0.7 0.0

-146 -

(1/10) Consumer Price Index (All Egypt, Urban) (1999/2000=100)

2005

Source: Central Agency for Public Mobilization and Statistics ( Monthly Bulletin for Consumer Price Index ).

Change ( % )

2003 2004 2005End of Sept. June Sept. June Sept. June Sept.

First :Companies Listed on the Official Schedules

- Number of companies (in unit) 152 152 90 129 129 132 138

- Number of shares (mn) 1607 2689 2631 3661 3715 4236 4630

- Nominal value of Capital (LE mn) 12563 35906 36407 43597 45304 49274 52100

- Market value of Capital (LE mn) 23749 55706 61312 95103 120251 250136 304977

Second :Companies Listed on the Unofficial Schedules





Third :Companies Listed on the Temporary Schedules*

- Number of companies (in unit) 716 146 97 26 25

- Number of shares (mn) 2066 208 169 103 73

- Nominal value of Capital (LE mn) 30526 6439 5229 1567 1269

- Market value of Capital (LE mn) 42898 8974 7581 2516 1450

Fourth : All Companies





Source: Monthly Bulletin of Cairo & Alexandria Stock Exchanges* Companies which have not adjusted their statuses according to the new listing rules .

- 147 - (2/1) Companies Listed on the Stock Exchange

2002

During

Number of Transactions in

unit

Amount in Thousands

M.Value in mn


unit

Amount in Thousands

M.Value in mn

In Egyptian Pound 432320 520791 9490 1034305 1113182 35188

On the floor 419711 428652 8018 992495 904122 33253

Over the Counter 12609 92139 1472 41810 209060 1935

In Foreign Currencies (US$) 3980 4071 70 6994 107174 958

On the floor 3916 3368 13 6947 21066 840

Over the Counter 64 703 57 47 86108 118

Source: Capital Market Authority.

- 148 -

(2/2) Transactions on Shares on the Stock Exchange

July / Sept.

2004/2005 2005/2006

During


unitAmount in Unit M.Value ( 000s )

Number of Transactions

in unitAmount in Unit M.Value ( 000s )

In Egyptian Pound 52 34444 3566 142 1516641 1687280

On the floor 52 34444 3566 142 1516641 1687280

Over the Counter 0 0 0 0 0 0

In Foreign Currencies (US$) 0 0 0 11 7499 4095

On the floor 0 0 0 1 800 81

Over the Counter 0 0 0 10 6699 4014

Source:Capital Market Authority.

(2/3) Transactions on Bonds & Mutual Fund Documents on the Stock Exchange

- 149 -

2004/2005 2005/2006

July / Sept.

Jun-05 Sep-05 Jun-05 Sep-05

First - Jul-96 Bank of New York CIB 1 9999 8.13 9.95 47.77 59.04

Second - Jul-96 Bank of New York CIB 1 7310 14.50 9.50 82.00 57.61

NBE

Third - Oct-97 Deutsche Bank Citibank 3 6297 1.90 2.23 31.33 40.35

Fourth - Apr-98 Bank of New York CIB 2 6496 4.88 3.50 46.44 40.48

Fifth - Aug-98 Bank of New York HSBC 0.5 4324 12.00 21.25 33.76 62.91

Sixth - Jun-99 Deutsche Bank Citibank 0.33 573 12.00 13.25 27.51 47.74

Seventh* - Jul-99 Bank of New York CIB 0.33 35000 0.44 0.44 - -

Eighth - Jul-00 Bank of New York CIB 2 11713 50.29 46.99 587.45 563.13

Ninth - Aug-02 Bank of New York CIB 0.5 50 57.38 73.50 164.57 208.05

tenth - Nov-04 Bank of New York CIB 1 8795 - - 108.00 108.00

Source: Monthly Bulletin of Cairo and Alexandria stock Exchanges.

* Last closing price was on 6/11/2002 as no trading has occurred after this date.

ConversionRatio

Volume on Offering

Date ( 000's )

Price($) at End of Price(LE) at End of

- 150 -

GDR's Listed on Global Exchanges

(2/4) Global Depository Receipts(GDR's)

Corporate Stocks Issued on Egyptian

Exchange

Order and Date of Offering Depository Bank Sub

CustodianBank

(LE mn)

End of 91 days 182 days 364 days 89 days Total

1999March 6701.0 9352.9 11145.4 - 27199.3June 6494.9 7918.1 11145.4 - 25558.4Sept. 6338.6 7909.2 11145.4 - 25393.2Dec. 5949.6 8274.7 11145.4 25369.7

2000March 5558.2 8675.8 11145.4 - 25379.4June 5585.3 8675.9 11131.9 - 25393.1Sept. 5773.3 8637.9 14457.4 - 28868.6Dec. 5714.9 8666.5 14457.4 - 28838.8



2003March 15250.8 24259.7 14457.4 - 53967.9June 16235.7 24625.2 14457.4 - 55318.3Sept. 14975.2 26776.5 14457.4 - 56209.1Dec. 6272.9 28066.3 14457.4 13001.4 61798.0

2004March 15294.0 30476.8 14457.4 4081.4 64309.6June 18462.7 38852.7 26458.2 - 83773.6Sept. 11000.0 48196.3 48958.2 - 108154.5Dec. 8600.0 45466.8 66558.2 - 120625.0

2005March 0.0 34550.0 82358.2 - 116908.2June 2750.0 23900.0 98257.4 - 124907.4Sept. 8900.0 22350.0 71725.6 - 102975.6

Source: Central Bank of Egypt.

(2/5) The Outstanding Balance of Treasury Bills (Quarterly)

- 151 -

(LE mn)

91 days 182 days 364 days Total

July 2005The: First week (7/7) 3750.0 23900.0 98257.4 125907.4 Second (14/7) 4150.0 21500.0 99257.4 124907.4 Third (21/7) 4400.0 22000.0 99757.4 126157.4 Fourth (28/7) 4400.0 22500.0 100757.4 127657.4

End of month 4400.0 22500.0 100757.4 127657.4

August 2005The: First week (2/8) 4400.0 22500.0 94757.4 121657.4 Second (9/8) 4400.0 22500.0 95957.4 122857.4 Third (16/8) 4400.0 21600.0 94957.4 120957.4 Fourth (23/8) 3900.0 22100.0 95957.4 121957.4

End of month 4900.0 21600.0 84543.6 111043.6

September 2005The: First week (1/9) 4900.0 21600.0 84543.6 111043.6 Second (8/9) 5900.0 22100.0 85043.6 113043.6 Third (15/9) 5900.0 22100.0 87543.6 115543.6 Fourth (22/9) 7400.0 21850.0 87543.6 116793.6

End of month 8900.0 22350.0 71725.6 102975.6Source: Central Bank of Egypt.

- 152 - (2/6) The Outstanding Balance of Treasury Bills (Weekly)

Date of Value Interest Maturity & Issue (LE mn) Rate due Date

Fifth Tranche 10/16/1998 500 10.000% 7 years, 16/10/2005

Sixth Tranche 1/15/1999 500 10.000% 7 years, 15/01/2006

Seventh Tranche 3/1/1999 2000 9.500% 10 years, 01/03/2009

Eighth Tranche 4/16/1999 2000 10.000% 10 years, 16/04/2009

NinthTranche 5/3/1999 3000 11.000% 7 years, 03/05/2007

TenthTranche 1/1/2004 4000 8.000% 3 years, 01/01/2007

Bonds under the Primary Dealers System **Eleventh Tranche ( 1 ) 10/26/2004 5000 11.500% 7 years,26/10/2011

Twelveth Tranche ( 2 ) 11/16/2004 5000 11.625% 10 years,16/11/2014

Thirteenth Tranche 7/12/2005 3000 10.938% 4 years,07/12/2008

Fourteenth Tranche 1/18/2005 1000 11.400% 20 years,18/01/2025

Fifteenth Tranche 7/12/2005 2000 9.100% 5 years,12/07/2010

Sixteenth Tranche 8/2/2005 2000 9.250% 4 years,02/08/2009Seventeenth Tranche 8/16/2005 2000 9.350% 5 years,16/08/2010Eighteenth Tranche 9/20/2005 2000 9.100% 7 years,20/09/2012Source : Central Bank of Egypt

* Issued by Law No. 4 /1995.** This system was put into force as of Iuly 2004, in virtue of the Minister of Finance 's Decree No.480 for 2002 and the provisions governing

it, issued by the Minister of Finance's Decree No. 723 for 2002, in accordance with Article (7) of Law No. 92 for 2004.

( 1 ) Increased by LE 2.0 billion, due to their re-opening on 8/2/2005 on the same conditions.

( 2 ) Increased by LE 2.0 billion, due to their re-opening on 22/3/2005 on the same conditions.

(2/7) The Outstanding Balance of Treasury Bonds*End of September 2005

- 153 -

( LE mn )

The Budget Sector

The Budget Sector,

NIB

The Budget

Sector,NIB, & SIFs

The Budget Sector

The Budget Sector,

NIB

The Budget

Sector,NIB, & SIFs

Total Expenditures 187817 172627 192122 32374 29913 37542Compensation of employees 45843 45898 46360 12409 12418 12512

Salaries and wages 34644 34697 35107 10372 10381 10475Social contributions 5284 5286 5338 1548 1548 1548Other 5915 5915 5915 489 489 489

Purchases of goods and services 13143 13155 13234 1939 1942 1948Goods 5511 5514 5526 617 619 622Serivces 4884 4887 4936 1198 1199 1202Other 2748 2754 2772 124 124 124

Interests 42605 38315 38315 5887 6213 6213Foreign interests 4015 4015 4015 1131 1131 1131Domestic interests 38590 34300 34300 4756 5082 5082

To NIB 12314 957 957 945 0 0To others 26276 33343 33343 3811 5082 5082

Subsidies, Grants, Social benefits 50546 39546 58427 5830 3030 10556Subsidies 35361 35361 35361 2510 2471 2471

To GASC 9749 9749 9749 1910 1910 1910To petroleum 22078 22078 22078 0 0 0To others 3534 3534 3534 600 561 561

Grants 1834 1834 1834 314 314 314Social benefits 12326 1326 20207 3006 245 7771

Contribution to social funds 11000 0 18881 2761 0 7526Other 1326 1326 1326 245 245 245

Other 1025 1025 1025 0 0 0Other expenditures 18285 18315 18317 4350 4351 4354

Defense 15486 15486 15486 3780 3780 3780Other 2799 2829 2831 570 571 574

Purchases of non financial assets 17395 17398 17469 1959 1959 1959Fixed assets 14988 14991 15062 1803 1803 1803Others 2407 2407 2407 156 156 156

Source : The Ministry of Finance .

* According to the State Budget new classification, in line with the IMF's GFS 2001.

- 154 - 3 Months (Actual)

(3/1) Consolidated Fiscal Operations of General Government *

Prel. Estimates

(Total Expenditures)( The Budget sector , NIB , and SIFs )

2005/2006

( LE mn )

The Budget Sector

The Budget Sector,

NIB

The Budget Sector,NIB,

& SIFs

The Budget Sector

The Budget Sector,

NIB


& SIFs

Total Revenues 130152 134495 155396 24629 25226 29599Taxes Revenues 81607 81607 81607 13448 13448 13448

Tax on Income, Profits 34844 34844 34844 4474 4474 4474From EGPC 12544 12544 12544 0 0 0From SCA 7479 7479 7479 1479 1479 1479From CBE 135 135 135 0 0 0From Other Units 6267 6267 6267 1011 1011 1011Payable by individuals 8419 8419 8419 1984 1984 1984

Taxes on Property 1004 1004 1004 164 164 164Taxes on Goods and Services 32359 32359 32359 6433 6433 6433Taxes on International Trade 9115 9115 9115 1941 1941 1941Other Taxes 4285 4285 4285 436 436 436

Grants 2861 2861 2861 -82 -82 -82Current 1680 1680 1680 -95 -95 -95Capital 1181 1181 1181 13 13 13

Other Revenues 45684 50027 70928 11263 11860 16233Property Income 37902 42246 44034 10016 10601 10956

From EGPC 12599 12599 12599 0 0 0From SCA 10467 10467 10467 2600 2600 2600From CBE 2137 2137 2137 0 0 0From Economic Authorities 931 931 931 80 80 80From Companies 1602 1602 1689 221 221 221Other from EGPC 7540 7540 7540 6899 6899 6899Other 2626 6970 8671 216 801 1156

Sales of Goods and Services 5096 5096 5096 775 775 775Financing investment 978 978 978 131 131 131Other 1708 1707 20820 341 353 4371

Source : The Ministry of Finance .

* According to the State Budget new classification, in line with the IMF's GFS 2001.

- 155 - 3 Months (Actual)

(3/2) Consolidated Fiscal Operations of General Government *

Prel. Estimates

(Total Revenues)( The Budget sector , NIB , and SIFs )

2005/2006

( LE mn )

The Budget Sector

The Budget Sector,

NIB

The Budget

Sector,NIB, & SIFs

The

Budget Sector

The Budget Sector,

NIB


& SIFs

Total Revenues 130152 134495 155396 24629 25226 29599Total Expenditures 187817 172627 192122 32374 29913 37542

Cash Deficit 57665 38132 36726 7745 4687 7943Net Acquisition of Financial Assets 1735 11052 12574 365 2804 5485Overall fiscal 59400 49184 49300 8110 7491 13428Financing Sources 59400 49182 49299 8110 7491 13428Domestic Financing 61371 64125 64645 5925 6616 8094

Banking Financing 34321 34721 35241 -7022 -5896 -4418Central Bank 6960 7460 7460 -22819 -22296 -22296Other Banks 27361 27261 27781 15797 16400 17878

Non Banking Financing 27050 29404 29404 12947 12512 12512NIB 5755 4847 4847 -77 0 0Other 21295 21295 21295 13024 13024 13024NIB Borrowing 0 3262 3262 0 -512 -512

Foreign Borrowing 3000 3000 3000 4843 4843 4843Arrears 0 0 0 0 0 0Other -1195 -1195 -10322 -26 -26 -26Financing Effects for Eliminations 0 -12972 -4248 0 -2338 2121Exchange Rate Revaluation 0 0 0 -275 -275 -275Net Privatization Proceeds 3000 3000 3000 846 846 846

Privatization Proceeds 5000 5000 5000 1017 1017 1017Treasury Contribution in the Fund 2000 2000 2000 171 171 171

Discrepancy -6776 -6776 -6776 -3203 -2175 -2175Cash Deficit (Surplus ) as a percentage of GDP 9.7% 6.4% 6.2% 1.3% 0.8% 1.3%Overall fiscal balance as a percentage of GDP 10.0% 8.3% 8.3% 1.4% 1.3% 2.3%Revenues as a percentage of GDP 22.0% 22.7% 26.2% 4.2% 4.3% 5.0%Expenditure as a percentage of GDP 31.7% 29.1% 32.4% 5.5% 5.0% 6.3%Source : The Ministry of Finance . * According to the State Budget new classification, in line with the IMF's GFS 2001.

(3/3)Summary of The Consolidated Fiscal Operations of General Government *

Prel. Estimates

( The Budget sector , NIB , and SIFs )

- 156 -

3 Months (Actual)

2005/2006

(LE mn)

End of June 2005 Sept. 2005 Change +(-)

Value % Value % 2005/2006 Government Domestic Debt 349169 100.0 355094 100.0 5925

- Bonds & Bills 340898 97.6 325983 91.8 -14915 - Treasury bonds, of which : 200284 57.4 207361 58.4 7077

Local currency bonds with public sector banks 4000 1.1 4000 1.1 -

Euro sovereign bonds (US$) offered abroad * 5122 1.5 5199 1.5 77

- Government notes to compensate the actuarial reserve deficit in social insurance funds 2000 0.6 2000 0.6 -

- Housing bonds 124 0.1 125 0.0 1

- Treasury bills 124907 35.8 102976 29.0 -21931 - Foreign currency bonds with public sector commercial banks 12070 3.5 12008 3.4 -62

- The equivalent of the retained 5% of corporate profits to purchase government bonds 1513 0.4 1513 0.4 0

- Net Government Balances with the Banking System -135480 -38.8 -114411 -32.2 21069

- Government Borrowing from NIB 143751 41.2 143522 40.4 -229

Economic Authorities Debt 47176 100.0 51492 100.0 4316 - Net Balance of Economic Authorities with the Banking System -11089 -23.5 -8299 -16.1 2790 - Borrowing of Economic Authorities from NIB 58265 123.5 59791 116.1 1526

Source: The Ministry of Finance, Central Bank of Egypt & National Investment Bank. * Holdings of financial institutions resident in Egypt ( the banking system and the insurance sector).

(3/4) Domestic Debt of Government & of Economic Authorities - 157 -

(LE mn)

End of Change +(-)Value % Value % 2005/2006

Resources: 316476 100.0 318238 100.0 1762. Social insurance fund for gov. employees 122913 38.8 123063 38.7 150

. Social insurance fund for pub. & Priv. Business sectors employees 96093 30.4 96093 30.2 0

. Proceeds from the investment certificates 58485 18.5 58493 18.4 8

. Accumulated interest of the investment certificates (Category A) 6852 2.2 6963 2.2 111

. Proceeds from US dollar development bonds 1418 0.4 1135 0.4 -283

. Post office savings 33902 10.7 34297 10.8 395

.Net balances of the NIB with the banking system -4917 -1.6 -3480 -1.1 1437

. Other * 1730 0.5 1674 0.5 -56

Uses: 316476 100.0 318238 100.0 1762. Government 143751 45.4 143522 45.1 -229

. Economic authorities 58265 18.4 59791 18.8 1526

. Other 114460 36.2 114925 36.1 465

* Including deposits of the private insurance funds, saving certificates, loans & deposits of various authorities.

- 158 -

June 2005 Sept. 2005

(3/5) National Investment Bank

(Resources & Uses)

(LEmn)

Change

Value % Value % (-)

Balance of Current Account 9220.1 1898.6 (7321.5)

Balance of Current Account (Excluding Transfers) 2528.4 (5927.8) (8456.2)

Receipts 45314.1 100.0 49923.6 100.0 4609.5

Export proceeds** 19322.6 42.6 23251.2 46.6 3928.6

Transportation, of which 6254.6 13.8 6716.9 13.5 462.3

Suez Canal dues (4814.2) (10.6) (5026.1) (10.1) 211.9

Travel 13119.9 29.0 13392.7 26.8 272.8

Investment income 954.1 2.1 2233.7 4.5 1279.6

Government services 252.9 0.6 256.5 0.5 3.6

Other receipts 5410.0 11.9 4072.6 8.1 (1337.4)

Payments 42785.7 100.0 55851.4 100.0 13065.7

Import payments** 33339.8 77.9 41699.0 74.7 8359.2

Transportation 1141.4 2.7 1559.7 2.8 418.3

Travel 1724.1 4.0 2277.2 4.1 553.1

Investment income, of which 2205.7 5.2 2940.7 5.3 735.0

Interest paid (1162.4) (2.7) (1034.7) (1.9) (127.7)

Government expenditures 867.8 2.0 1959.4 3.5 1091.6

Other payments 3506.9 8.2 5415.4 9.6 1908.5

Transfers 6691.7 100.0 7826.4 100.0 1134.7

Private (net) 5039.0 75.3 7295.2 93.2 2256.2

Official (net) 1652.7 24.7 531.2 6.8 (1121.5)

* Preliminary figures

** Including the exports & imports of free zones

- 159 -

(4/1) Balance of Payments

July / Sept.

2004/2005 2005/2006*

(LE mn)

2004/2005 2005/2006*Value Value

Capital & Financial Account -8768.1 10436.0

Capital Account 0.0 0.0

Financial Account -8768.1 10436.0 Direct Investment Abroad -31.1 -107.3 Direct Investment in Egypt (Net) 4813.7 11230.3 Portfolio Investments Abroad 453.1 452.8 Portfolio Investments in Egypt ( Net), Of which : 239.9 14876.8 Bonds 56.6 16070.2

Other Investments (Net) -14243.7 -16016.6 Net Borrowing 476.0 -227.8 Medium and Long - Term Loans -1560.0 -2281.3 Drawings 1204.4 693.3

Repayments -2764.4 -2974.6

Medium - Term Suppliers Credit -444.4 -294.7 Drawings 34.2 10.4

Repayments -478.6 -305.1

Short - Term Suppliers Credit (Net) 2480.4 2348.2 Other Assets -13009.3 -13230.7 CBE -5.0 32.3

Banks -5591.0 -8941.0

Other -7413.3 -4322.0

Other Liabilities -1710.4 -2558.1 CBE 5.6 9.8

Banks -1716.0 -2567.9

Net Errors & Omissions -1092.8 -1883.6Overall Balance -640.8 10451.0Change in Reserve Assets, Increase (-) 640.8 -10451.0Source: CBE


- 160 -

(4/1) Balance of Payments (Contd.)

July / Sept.

(US$mn)

Change

Value % Value % (-)

Balance of Current Account 1482.0 326.7 (1155.3)

Balance of Current Account (Excluding Transfers) 406.2 (1028.3) (1434.5)

Receipts 7291.4 100.0 8653.7 100.0 1362.3

Export proceeds** 3109.3 42.6 4031.0 46.6 921.7

Transportation, of which 1006.4 13.8 1164.6 13.5 158.2

Suez Canal dues (774.6) (10.6) (871.4) (10.1) 96.8

Travel 2111.0 29.0 2321.9 26.8 210.9

Investment income 153.5 2.1 387.2 4.5 233.7

Government services 40.7 0.6 44.5 0.5 3.8

Other receipts 870.5 11.9 704.5 8.1 (166.0)

Payments 6885.2 100.0 9682.0 100.0 2796.8

Import payments** 5364.7 77.9 7229.2 74.7 1864.5

Transportation 183.6 2.7 269.2 2.8 85.6

Travel 277.4 4.0 394.3 4.1 116.9

Investment income, of which 354.9 5.2 509.8 5.3 154.9

Interest paid (187.0) (2.7) (179.4) (1.9) (7.6)

Government expenditures 140.3 2.0 340.3 3.5 200.0

Other payments 564.3 8.2 939.2 9.6 374.9

Transfers 1075.8 100.0 1355.0 100.0 279.2

Private (net) 810.8 75.4 1264.7 93.3 453.9

Official (net) 265.0 24.6 90.3 6.7 (174.7)

*Preliminary figures

**Including the exports & imports of free zones

- 161 -

(4/2) Balance of Payments

July / Sept.2004/2005 2005/2006*

(US$mn)

2004/2005 2005/2006*Value Value

Capital & Financial Account -1410.8 1809.3

Capital Account 0.0 0.0Financial Account -1410.8 1809.3 Direct Investment Abroad -5.0 -18.6 Direct Investment in Egypt (Net) 774.5 1947.0 Portfolio Investments Abroad 72.9 78.5 Portfolio Investments in Egypt (Net), Of which : 38.6 2579.2 Bonds 9.1 2786.1

Other Investments (Net) -2291.8 -2776.8 Net Borrowing 76.6 -39.5 Medium and Long - Term Loans -251.0 -395.5 Drawings 193.8 120.2


Medium - Term Suppliers Credit -71.5 -51.1 Drawings 5.5 1.8


Short - Term Suppliers Credit (Net) 399.1 407.1 Other Assets -2093.2 -2293.8 CBE -0.8 5.6

Banks -899.6 -1550.1

Other -1192.8 -749.3

Other Liabilities -275.2 -443.5 CBE 0.9 1.7

Banks -276.1 -445.2

Net Errors & Omissions -174.3 -324.1Overall Balance -103.1 1811.9Change in Reserve Assets, Increase (-) 103.1 -1811.9Source: CBE


- 162 -

(4/2) Balance of Payments (Contd.)

July / Sept.

Change

Value % Value % (-)

Total **** 3109.3 100.0 4031.0 100.0 921.7Fuels, Mineral Oils & Products 1267.1 40.8 2163.7 53.7 896.6Crude petroleum 475.9 15.3 759.7 18.8 283.8Petroleum products *** 743.3 23.9 1378.1 34.2 634.8Charcoal & types thereof 7.1 0.2 8.5 0.2 1.4Other 40.8 1.3 17.4 0.5 (23.4)Raw Materials 124.6 4.0 130.2 3.2 5.6Cotton 15.2 0.5 32.8 0.8 17.6Maize 0.0 0.0 25.7 0.7 25.7Potatoes 0.0 0.0 0.5 0.0 0.5Citrus fruits 0.5 0.0 4.5 0.1 4.0Lentils 0.0 0.0 0.1 0.0 0.1Spices & vanilla 0.4 0.0 0.5 0.0 0.1Groundnuts 1.8 0.1 0.9 0.0 (0.9)Medicinal plants 0.8 0.0 0.9 0.0 0.1Flax , raw 35.1 1.1 22.2 0.6 (12.9)Other 70.8 2.3 42.1 1.0 (28.7)Semi-finished Goods 208.6 6.7 283.7 7.0 75.1Carbon 1.3 0.0 4.7 0.1 3.4Essential oils & resins 1.3 0.0 1.1 0.0 (0.2)Cotton yarn 32.2 1.0 33.4 0.8 1.2

- 163 -(4/3) Exports by Degree of Processing *

(US$ mn)July/September

2004/2005 2005/2006 **

Change

Value % Value % (-)

Aluminium, not mixed 10.5 0.4 38.1 1.0 27.6

Animal and vegetable fats, greases & oils and products 32.8 1.1 3.7 0.1 (29.1)

Molasses 2.5 0.1 1.7 0.0 (0.8)

Organic & inorganic chemicals 47.7 1.5 89.2 2.2 41.5

Cast iron & semi-finished products thereof 51.6 1.7 77.9 1.9 26.3

Leather , tanned 15.9 0.5 12.2 0.3 (3.7)

Plastic & articles thereof 6.0 0.2 13.8 0.4 7.8

Other 6.8 0.2 7.9 0.2 1.1

Finished Goods 1316.1 42.3 1190.9 29.6 (125.2)

Dairy products 3.2 0.1 0.7 0.0 (2.5)

Preserved & dried vegetables 0.8 0.0 0.3 0.0 (0.5)

Dried onion 0.8 0.0 1.1 0.0 0.3

Rice 22.3 0.7 21.3 0.5 (1.0)

Vegetables & fruits products 1.4 0.0 3.0 0.1 1.6

Sugar and its products 13.3 0.4 10.8 0.3 (2.5)

Pharmaceuticals 35.4 1.1 24.7 0.6 (10.7)

Fertilizers 45.7 1.5 39.6 1.0 (6.1)

Cement 68.1 2.2 32.4 0.8 (35.7)

Essential oils & resins 12.0 0.4 4.0 0.1 (8.0)

Leather products 0.9 0.0 0.4 0.0 (0.5)

Rubber & articles 3.7 0.1 3.8 0.1 0.1

- 164 -

(4/3) Exports by Degree of Processing *(Contd.)(US$ mn)

July/September

2004/2005 2005/2006 **

Change

Value % Value % (-)

Paper , cardboard paper & articles thereof 23.7 0.8 26.1 0.7 2.4

Chinaware products 31.2 1.0 24.4 0.6 (6.8)

Cars, tractors & bicycles 56.2 1.8 25.6 0.6 (30.6)

Cotton textiles 57.5 1.8 48.2 1.2 (9.3)

Carpets & other floor covering 24.1 0.8 36.9 0.9 12.8

Shoes & accessories 3.1 0.1 1.7 0.0 (1.4)

Ready-made clothes 64.9 2.1 68.5 1.7 3.6

Glass & Glassware 49.9 1.6 79.0 2.0 29.1

Copper & articles 4.2 0.1 11.9 0.3 7.7

Aluminium articles 66.9 2.2 28.5 0.7 (38.4)

Articles of iron and steel 231.6 7.4 112.7 2.8 (118.9)

Wooden furniture 2.2 0.1 1.6 0.0 (0.6)

Marble & Granite 9.0 0.3 15.5 0.4 6.5

Air Conditioners 15.8 0.5 66.8 1.7 51.0Electric machines & Appliances, recorders & T.V sets & their accessories 48.1 1.5 54.2 1.4 6.1

Other 420.1 13.5 447.2 11.1 27.1

Miscellaneous products (undistributed) 192.9 6.2 262.5 6.5 69.6

Source: Central Bank of Egypt.* According to the Harmonized System** Provisional.*** Include bunker and jet fuel.**** Include exports of free zones.

- 165 -

2004/2005 2005/2006 **

July/September(US$ mn)

(4/3) Exports by Degree of Processing *(Contd.)

ChangeValue % Value % (-)

Total *** 5364.7 100.0 7229.2 100.0 1864.5Fuels, Mineral Oils & Products 406.5 7.6 354.3 4.9 (52.2)Petroleum products 385.6 7.2 336.7 4.7 (48.9)Charcoal & types thereof 20.4 0.4 16.8 0.2 (3.6)Other 0.5 0.0 0.8 0.0 0.3Raw Materials 744.1 13.9 1329.2 18.4 585.1Crude petroleum 153.5 2.9 816.1 11.3 662.6Wheat 299.8 5.6 156.3 2.2 (143.5)Maize 101.2 1.9 139.8 1.9 38.6Sesame 6.7 0.1 1.1 0.0 (5.6)Tobacco 74.8 1.4 36.6 0.5 (38.2)Iron ore 4.9 0.1 13.7 0.2 8.8Seeds & oleaginous seeds 34.0 0.6 21.7 0.3 (12.3)Cotton 28.5 0.5 18.1 0.3 (10.4)Other 40.7 0.8 125.8 1.7 85.1Intermediate Goods 1748.8 32.6 2175.5 30.1 426.7 Sugar, raw 57.5 1.1 41.8 0.6 (15.7)Animal and vegetable fats, greases & oils and products 160.0 3.0 149.8 2.1 (10.2)Cement 0.4 0.0 3.9 0.1 3.5Organic & inorganic chemicals 216.4 4.0 184.9 2.6 (31.5)Fertilizers 6.6 0.1 64.3 0.9 57.7Tanning & dyeing extracts 32.7 0.6 26.8 0.4 (5.9)Plastic & articles thereof 151.6 2.8 170.1 2.4 18.5Wood & articles thereof 102.2 1.9 126.3 1.7 24.1

- 166 -(4/4) Imports by Degree of Use *

(US$ mn)July/September

2004/2005 2005/2006 **


Paper , cardboard paper & articles thereof 126.0 2.3 112.0 1.5 (14.0)Synthetic fibers 92.5 1.7 64.1 0.9 (28.4)Chinaware products 29.7 0.6 32.9 0.5 3.2Iron & steel products 177.3 3.3 428.4 5.9 251.1Copper & articles 15.1 0.3 29.2 0.4 14.1Rubber & articles 52.6 1.0 48.8 0.7 (3.8)Aluminium & articles 26.5 0.5 18.7 0.3 (7.8)Other 501.7 9.4 673.5 9.3 171.8Investment Goods 1439.5 26.8 1850.0 25.6 410.5Pumps , fans & parts thereof 30.6 0.6 73.2 1.0 42.6Machines and apparatus for ginning and spinning & parts thereof 17.8 0.3 13.3 0.2 (4.5)Computers 34.3 0.6 47.9 0.7 13.6Motors , generators, transformers & parts thereof 18.7 0.3 36.4 0.5 17.7Locomotives, carriages and railway and trams equipment & their parts 21.0 0.4 13.8 0.2 (7.2)Tractors 2.5 0.0 6.0 0.1 3.5Vehicles for transport of passengers 4.9 0.1 6.2 0.1 1.3Vehicles for transport of goods 1.0 0.0 4.5 0.1 3.5Cars accessories and spare parts 97.5 1.8 138.7 1.9 41.2Air conditioners 26.2 0.5 24.7 0.3 (1.5)Lifts and bulldozers & parts thereof 23.6 0.4 23.1 0.3 (0.5)Agricultural machines 17.7 0.3 17.0 0.2 (0.7)Printing machinery & parts 8.9 0.2 4.8 0.1 (4.1)

- 167 -(US$ mn)

July/September2004/2005 2005/2006 **

(4/4) Imports by Degree of Use* (Contd.)


Electric appliances for telephones & telegraph 50.5 0.9 81.4 1.1 30.9Optical appliances 49.2 0.9 58.4 0.8 9.2Other 1035.1 19.3 1300.6 18.0 265.5Consumer Goods 700.9 13.1 847.3 11.7 146.4A - Durable Goods 197.3 3.7 217.5 3.0 20.2Refrigerators & electric freezers 15.8 0.3 19.1 0.3 3.3Televisions & parts thereof 12.0 0.2 15.0 0.2 3.0Cars 54.4 1.0 75.7 1.0 21.3Household electric-motor appliances 20.7 0.4 28.9 0.4 8.2Other 94.4 1.8 78.8 1.1 (15.6)B - Non-durable Goods 503.6 9.4 629.8 8.7 126.2Meat and entrails 42.4 0.8 57.4 0.8 15.0Fish and crustaceans 13.5 0.3 21.3 0.3 7.8Dairy products, eggs, poultry and honey 19.5 0.4 19.5 0.3 0.0Tea 30.0 0.6 18.9 0.3 (11.1)Weat flour 0.2 0.0 0.1 0.0 (0.1)Pharmaceuticals 117.9 2.2 147.2 2.0 29.3Insecticides 3.2 0.1 4.3 0.1 1.1Remains of foodstuff industries & animal fodder 47.3 0.9 46.2 0.6 (1.1)Live stock 2.2 0.0 4.5 0.1 2.3Ready-made clothes 28.3 0.5 50.0 0.7 21.7

(4/4) Imports by Degree of Use* (Contd.)(US$ mn)

- 168 -July/September

2004/2005 2005/2006 **


Cotton textiles 6.5 0.1 7.6 0.1 1.1

Sugar, refined and products 7.6 0.1 12.7 0.2 5.1

Lentils 14.5 0.3 5.1 0.1 (9.4)

Soap , detergents & artificial wax 8.0 0.1 13.0 0.2 5.0

Other 162.5 3.0 222.0 3.1 59.5

Miscellaneous Goods (undistributed) 324.9 6.0 672.9 9.3 348.0Source: Central Bank of Egypt.* According to the Harmonized System.** Provisional.*** Including imports of free zones.

- 169 -

July/September2004/2005 2005/2006 **

(4/4) Imports by Degree of Use* (Contd.)(US$ mn)

2004/2005 2005/2006** 2004/2005 2005/2006** 2004/2005 2005/2006**

Total *** 3109.3 4031.0 5364.7 7229.2 (2255.4) (3198.2)

European Union countries 1145.4 1445.5 1737.6 2702.6 (592.2) (1257.1)

Other European countries 172.8 279.6 494.2 591.5 (321.4) (311.9)

Russian Federation & C.I.S 14.8 12.1 82.4 281.8 (67.6) (269.7)

United States of America 1095.1 1236.8 1241.9 1457.7 (146.8) (220.9)

Arab countries 345.9 448.6 457.9 558.8 (112.0) (110.2)

Asian countries 274.5 441.6 906.3 1028.4 (631.8) (586.8)

African countries 42.7 64.0 39.9 37.4 2.8 26.6

Australia 2.7 1.0 57.0 58.7 (54.3) (57.7)

Other countries and regions 15.4 101.8 347.5 512.3 (332.1) (410.5)

Source: Central Bank of Egypt* Include in-kind grants** Provisional*** Include exports & imports of free zones

- 170 -(4/5) Regional Distribution of Exports and Imports

July/September

Trade BalancePayments for Imports*Proceeds of Exports

(US$ mn)

Minimum

Maximum

Weighted average

Buy Sell

US Dollar 575.17 577.72

Euro 693.36 696.84

Pound Sterling 1015.74 1020.54

100 Japanese Yen 509.90 512.25

Swiss Franc 444.97 447.05

Saudi Riyal 153.29 153.98

Kuwaiti Dinar 1969.01 1978.42

UAE Dirham 156.59 157.31

Second: Market Rates

Source : CBE daily exchange rates

The interbank Rates started at 23/12/2004

First : US$ Interbank Rates

575.41

575.49

575.44

End of Sept. 2005

- 171 -

(4/6) Average Foreign Exchange Rates

(In piasters per foreign currency unit)

(4 / 7) External Debt (US$ mn)Change

(-)%Value%Value

725.6100.029674.4100.028948.8Total External Debt **

(360.8)51.815373.354.415734.1Rescheduled bilateral debt +

(129.4)26.07707.027.17836.4 ODA(231.4)25.87666.327.37897.7 Non-ODA(18.6)14.44272.714.84291.3Other bilateral debt(1.3)11.93528.612.23529.9 Paris club countries

(17.3)2.5744.12.6761.4 Other countries29.917.15088.117.55058.2International & regional organizations(34.2)2.5747.42.7781.6Suppliers' & buyers' Credit

1232.56.21846.12.1613.6Egyptian bonds and notes0.01.7500.01.7500.0Long-term Deposits

(118.3)5.91736.56.41854.8Short term debt :(86.4)2.5732.92.8819.3 Deposits(31.9)3.41003.63.61035.5 Other Facilities(4.9)0.4110.30.4115.2Private sector debt (Non guaranteed)

Source: Loans & External Debt Department - CBE* Provisional.** The difference from World Bank data is in short-term debt.+ According to the agreement signed with Paris club countries on 25/5/1991.

June 2005 September 2005 *End of

- 172 -

2003/2004 Change 2004/2005 Change 2005/2006 Change

Final % Final % Estimates* %

Cultivated area (Thousand Feddans) 531 -19.4 731 37.7 650 -11.1

Productivity (Metric Cantar/Feddan) 7.5 7.1 8.0 6.7 8.5 6.3

Crop (without scarto) 3963 -13.7 5833 47.2 5520 -5.4

Extra-long staple 1168 125.0 1551 32.8 1205 -22.3

Long & medium-long staple 2795 -31.4 4282 53.2 4315 0.8

Opening stock 24 -98.1 377 1470.8 149 -60.5

Total Supply 3987 -32.0 6210 55.8 5669 -8.7

Total Distribution 3610 -25.8 6223 72.4 179 + -97.1

For local mills 2473 -14.3 3283 32.8 46 -98.6

Export commitments 1137 -68.8 2940 158.6 133 -95.5

Carry over stock 377 -62.1 149 -60.5 5490 3584.6

Average farm-gate price** (LE/Cantar) 595 39.0 612 2.9 660 7.8Source: CBE (Alex. Branch), The Holding Company for Spinning , Weaving and Clothes.

* the Cotton Arbitration & Testing General Organisation (CATGO)** The average purchase rate of Giza 70 & 86 varieties. + Until End of September 2005.

(5/1) Position of Egyptian Cotton- 173 -

(Thousand Metric Cantars)

Seasons

Tourists % Tourist % Tourists % Tourist % Tourists % Tourist %

Nights Nights Nights

Total 1939 21769 2390 28146 2214 27316European Countries 1077 100.0 10751 100.0 1437 100.0 14540 100.0 1266 100.0 13479 100.0

East Europe 230 21.4 2351 21.9 322 22.4 3090 21.3 296 23.4 2904 21.5

West Europe 847 78.6 8400 78.1 1115 77.6 11450 78.7 970 76.6 10575 78.5France 63 5.8 750 7.0 88 6.1 1026 7.1 84 6.6 995 7.4

Germany 199 18.5 2087 19.4 265 18.5 3059 21.0 235 18.6 2673 19.8

Italy 275 25.5 2596 24.1 324 22.6 3024 20.8 185 14.6 1854 13.8

Spain 46 4.3 439 4.1 58 4.0 488 3.3 42 3.3 400 3.0

Switzerland 22 2.0 187 1.7 28 1.9 274 1.9 22 1.7 214 1.6

United Kingdom 108 10.0 957 8.9 153 10.6 1460 10.0 217 17.2 2285 16.9

Other 134 12.5 1384 12.9 199 13.8 2119 14.6 185 14.6 2154 16.0

The Middle East Countries 681 100.0 8626 100.0 730 100.0 10494 100.0 704 100.0 10499 100.0Jordan 37 5.4 396 4.6 41 5.6 454 4.3 39 5.6 436 4.2

Kuwait 40 5.9 683 7.9 39 5.3 822 7.8 41 5.8 847 8.1

Palestine 80 11.8 999 11.6 55 7.5 949 9.1 74 10.5 964 9.2

Saudi Arabia 149 21.9 2476 28.7 154 21.1 3527 33.6 181 25.7 3645 34.7

Syria 24 3.5 216 2.5 23 3.2 236 2.3 26 3.7 247 2.3

Other 351 51.5 3856 44.7 418 57.3 4506 42.9 343 48.7 4360 41.5

Source : Central Agency for Public Mobilization and Statistics.

- 174 - (6/1) Number of Arrivals and Tourist Nights Departures (by Group)

(In Thousand)

July/Sept. 2003/2004 July/Sept. 2004/2005 July/Sept. 2005/2006

Tourists % Tourist % Tourists % Tourist % Tourists % Tourist %

Nights Nights Nights

African Countries 58 100.0 786 100.0 72 100.0 1028 100.0 77 100.0 1096 100.0South Africa 5 8.6 27 3.5 6 8.3 34 3.3 5 6.5 35 3.2

Morocco 7 12.1 92 11.7 8 11.1 107 10.4 9 11.7 100 9.1

Sudan 21 36.2 429 54.6 29 40.3 610 59.3 32 41.6 666 60.8

Tunisia 9 15.5 71 9.0 8 11.1 81 7.9 8 10.4 82 7.5

Other 16 27.6 167 21.2 21 29.2 196 19.1 23 29.8 213 19.4

Americas 50 100.0 961 100.0 65 100.0 1187 100.0 72 100.0 1268 100.0Canada 10 20.0 163 17.0 12 18.5 208 17.5 13 18.0 247 19.5

United States 32 64.0 735 76.5 43 66.2 887 74.7 47 65.3 914 72.1

Latin America 8 16.0 63 6.5 10 15.3 92 7.8 12 16.7 107 8.4

Asia & Pacific 72 100.0 631 100.0 84 100.0 877 100.0 94 100.0 955 100.0Australia 8 11.1 86 13.6 11 13.1 121 13.8 13 13.9 143 15.0

Japan 15 20.8 87 13.8 14 16.7 90 10.3 16 17.0 108 11.3

South Korea 7 9.7 34 5.4 8 9.5 45 5.1 11 11.7 50 5.2

China 5 7.0 32 5.1 8 9.5 54 6.2 8 8.5 56 5.9

India 8 11.1 69 10.9 9 10.7 82 9.3 13 13.8 102 10.7

Other 29 40.3 323 51.2 34 40.5 485 55.3 33 35.1 496 51.9

Other Countries 1 - 14 - 2 - 20 - 1 - 19 -Source : Central Agency for Public Mobilization and Statistics ( CAPMAS ).

- 175 - (6/1) Number of Arrivals and Tourist Nights Departures (by Group)(Contd.)

(In Thousand)

July/Sept. 2003/2004 July/Sept. 2004/2005 July/Sept. 2005/2006

( In Thousand)

Number Average Number Average Number AverageStay Stay Stay

Total 1799 12.1 2268 12.4 2167 12.6

Europe 1120 10.3 1509 10.2 1322 10.6

Middle East 519 15.2 555 17.2 618 16.2

Africa 49 16.0 65 15.8 68 16.0

Americas 55 17.5 65 18.3 72 17.6

Asia and the Pacific 55 11.5 72 12.3 85 11.3

Others 1 14.0 2 11.1 2 13.5

Source: Central Agency for Public Mobilization and Statistics (CAPMAS) .

- 176 - (6/2) Number of Tourists (Departures) & Average Stay

By Group

July/September2003/2004 2004/2005 2005/2006

Periodical Publications of the Central Bank of Egypt

Periodicity Language Name of Publication

Monthly Arabic and English 1 -Monthly Statistical Bulletin

Quarterly Arabic and English 2 -Economic Review

Every fiscal year Arabic and English 3 -Annual Report

Quarterly English 4 -External Position of the Egyptian Economy

Notes: - All publications of the Central Bank of Egypt are available on the CBE's

website : www.cbe.org.eg

- To obtain a hard copy of any publication by mail, please write to the following address: Research, Development and Publishing Sector, the Central Bank of Egypt, 31 Kasr El Nil Street. Cairo, Egypt.