5-Nov-16 World View -- Egypt fears more social unrest after sharp devaluation of currency

[John]

5-Nov-16 World View -- Egypt fears more social unrest after sharp devaluation of currency


Egypt's government says that 'the luxury of delay is not available'

** 5-Nov-16 World View -- Egypt fears more social unrest after sharp devaluation of currency
** http://www.generationaldynamics.com/pg/ ... tm#e161105


Contents:
Egypt, in economic crisis, sharply devalues currency in order to get an IMF loan
Egypt's government says that 'the luxury of delay is not available'


Keys:
Generational Dynamics, Egypt, International Monetary Fund, IMF,
Hosni Mubarak, Mohammed Morsi, Muslim Brotherhood,
Abdel al-Fattah al-Sisi, Qatar, Saudi Arabia,
Tarek Amer, Central Bank of Egypt, Sherif Ismail

[Anonymous1]

A subsidized fuel price is much different that currency valuation. If the US government paid farmers less money to grow corn, the value of the dollar would not change. It seems you are equating the two or placing a type of dependency with them to each other.

[John]

> A subsidized fuel price is much different that currency
> valuation. If the US government paid farmers less money to grow
> corn, the value of the dollar would not change. It seems you are
> equating the two or placing a type of dependency with them to each
> other.

First off, keep in mind that this "equating" isn't being done by me,
but by the IMF. I'm just reporting that these are two requirements
imposed by the IMF for Egypt to qualify for a $16 billion loan.

Although the two are not "equal," the purpose of both policies is to
impose discipline on the government's management of the economy. If
the IMF is going to lend Egypt $16 billion, then Egypt could use the
money to add to its dollar reserves and to continue buying votes with
subsidies, and Egypt would need a new bailout before long. By
imposing these two requirements, the IMF hopes to impose enough
discipline on Egypt's government so that a new bailout won't be
needed, which is a delusional hope.