CENTRAL BANK OF EGYPT

ECONOMIC REVIEW

Vol. 43 No. 3

2002/2003

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

1- Monetary and Banking Developments 1/1- Monetary and Banking Policy and Monetary Aggregates … … … … ... … 12 1/2- Banking Developments … … … … … … … … … … … … … ... . 25 2- The Stock Exchange 2/1- Shares Market … … … … … … … … … … … … … … … … … … … 39 2/2- Bonds Market … … … … … … … … … … … … … … … … … … .. 44 3- Public Finance and Domestic Public Debt

3/1- Consolidated Fiscal Operations of the General Government … … ... … .. 49 3/2- Domestic Public Debt … … … … … … … … … … … …. 57

4- External Transactions 4/1- Foreign Exchange Market… … … … … … … … … … … … … … … 61 4/2- Balance of Payments … … … … … … … … … … … … … ... … … 64 4/3- International Financing… … … … … … … … … … … … … … … 80 5- Cotton 5/1- Domestic Developments … … … … … … … … … … … … . 5/2- International Developments … … … … … … … … … … … …

95 100

6- Tourism 6/1- Number of Tourists … … … … … … … … … … … … … ... .. 6/2- Tourist Nights … … … … … … … … … … … … … ... … … . International Developments

103 105

7- International Economic and Monetary Developments 7/1- Economic Developments… … … … … … … … … … … … … … 109 7/2- Monetary Developments… … … … … … … … … … … … … …. 117

8- International Economic Cooperation8/1- International and Regional Meetings… … … … … … … … … … … 121

Annexes

a- Decisions Regarding Monetary Policy and Regulation of Banking Activity During the Period … … … … … … … 127 b- Statistical Section … … … … … … … … … … … … … … … … … .. 145

Major Monetary and Financial Indicators

July/March 2001/2002 2002/2003

End of Period

Price Index Cost of living index (1995/96 = 100)

126.4 130.9

Wholesale prices index (1986/87 = 100)

398.2 445.2

Money and Liquidity LE bn

- Domestic liquidity (M2) of the banking system (1) 313.9 366.6 - Reserve money 72.1 81.8 - Money supply (M1) 56.5 64.0 . Currency circulated outside the banking system 40.7 46.1 - Currency in circulation / money supply (%) 72.1 72.1

Deposits with Banks (2) - Total Deposits, of which: 325.8 384.7 . Business sector deposits (public and private) 65.3 70.5 . Household sector deposits 208.8 250.5 - Deposits in foreign currency 87.8 117.3

____________________________ (1) The banking system comprises the CBE, commercial banks, business and investment

banks (including the branches of foreign banks) and specialized banks. (2) The banking system excluding the CBE.

Bank Credit* (2) LE bn - Total credit granted by banks 344.5 392.4 . Government securities and bills 58.7 85.4 . Other securities (including the foreign sector) 23.4 25.3 . Loans to the government and public economic

authorities 13.9 13.4 . Loans to the business sector (public and private) 212.5 230.8 . Loans to the household sector and others 36.0 37.5 - Loans / deposits with banks (%) 80.5 73.2 - Portfolio and Treasury bills/deposits with banks (%) 25.2 28.8

Foreign Assets and Liabilities of the Banking System (1) - Foreign assets 87.0 112.4 18.8** 19.6** - Foreign liabilities 67.5 92.8 14.6** 16.2** - Net foreign assets 19.5 19.6 4.2** 3.4** July/March Discount and Interest Rates 2001/2002 2002/2003 End of Period (Per Annum %) - Lending and discount rate at CBE 11.00 10.00 - Average interest rate on 91- day Treasury bills 7.200 13.593 - Current interest rate on investment certificates 11.50 10.50 - Average interest rate on 3- month deposits with banks 9.54 8.12 - Average interest rate on one year or less loans with

banks

13.59

13.39 _______________________________ * Includes loans, securities and bills. ** In US$ billion. (1) The same note. (2) The same note.

US Dollar Exchange Rate Announced by the CBE

PT per US Dollar - Buying and selling exchange rates (period average) 435.9 485.4 - End of period 450.0 572.8 2002/2003 Consolidated Fiscal Operations of Revised Actual General Government

FY July/March(LE bn)

- Total expenditure, including net lending 128.8 92.8 - Total revenues, including grants 114.9 73.5

- The Overall Deficit/Surplus -13.9 -19.3

Total Financing 13.9 19.3 External financing (net) -3.3 -3.1 Domestic financing 18.6 33.3 Non-banking -3.8 11.2 Banking 22.4 22.1 Privatization 0.5 - Others (repayments) 0.6 - Unclassified -2.5 -10.9 - Current revenues/current expenditure 106.2 93.7 - Capital revenues/capital expenditure 6.3 6.6 - Overall deficit or surplus/GDP -3.4 -4.8 - Expenditure, including net lending/GDP 31.8 22.9 - Revenues, including grants/GDP 28.4 18.1

Domestic Public Debt End of June

2002 End of March

2003 - Domestic government debt 221.2 246.4 - Public economic authorities debt 41.1 39.3 - NIB debt 67.4 65.4 During the Period July/March 2001/2002 2002/2003 Balance of Payments (US$ bn)

Balance of Current Account & Transfers 0.3 0.7 Trade Balance (5.6) (5.3) Commodity exports 5.3 5.9

Oil and its products % 33.1 38.6 Other % 66.9 61.4

Commodity imports 10.9 11.2 Intermediary goods % 26.4 29.0

Investment goods % 22.0 21.8 Consumer goods % 18.9 17.9 Fuel, raw materials and others % 32.7 31.3

Services Balance 2.8 3.4 Receipts, of which: 7.2 7.7

Transportation % 28.2 28.2 Travel % 35.5 37.3 Investment income % 10.3 6.2

Payments, of which: 4.3 4.3 Transportation % 7.4 6.4 Travel % 21.8 25.4 Investment income % 15.3 15.9

Transfers 3.1 2.6 Official % 24.7 15.9 Private % 75.3 84.1 Capital and Financial Transactions (0.1) (1.7) Overall Surplus/(Deficit) (0.7) (0.1) Outstanding External Debt at End of March

27.5 28.7

National Developments

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A number of measures have been taken during the last quarter of the period

July/March 2002/2003, salient of which was the amendment of the Executive Regulations of the Foreign Exchange Law. According to this amendment, banks licensed to deal in the foreign exchange were allowed to set freely their exchange rates for buying and selling of foreign exchange through the free exchange market. Moreover, the CBE was obligated to announce on a daily basis its rate for foreign currency trading, based on the weighted average of the closing rates, as announced by the CBE Forex Statistics Chamber. Meanwhile, the activities of non-banking entities licensed to trade in foreign exchange in the free market were confined to the purchase and selling of banknotes, along with the purchase, collection and selling of traveler’s cheques issued by banks operating in Egypt or abroad. Meanwhile, these entities were prohibited from making any transfers from /to abroad; and from engaging in any of the banking activities prescribed in the Banks and Credit Law No. 120 of the year 1975 and its amendments.

On the other hand, the Prime Minister Decree No. 506 for the year 2003 was

issued, regulating the disposal of some foreign currency resources. Pursuant to the Decree, all ministries and entities subject thereto; public economic and service authorities; companies of the public and public business sectors; as well as individuals, companies and establishments of the private business sector, all whose business activities are paid in foreign currency, are obligated to keep regular records of their operations effected in foreign currency. Concurrently, all of them are also required to sell 75% of their foreign exchange earnings to banks, within a week as of the date of their collection. The remaining 25% is to be set aside in special accounts at national banks. It was decided to establish a special unit at the CBE, responsible for the collection of information and data on the payments of the foreign exchange that had been transferred to the national banks. The Decree also stipulated that the Ministry of Foreign Trade is to follow up compliance with these measures ; and issue the relevant regulations. The Executive Regulations of the Import and Export Law No. 118 of the year 1975 were amended accordingly.

Overview

Main Policies and Actions

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The Central Bank of Egypt has issued during the period under review a number of important decisions. It was decided to exclude the balances of treasury bills, with the remaining period of their maturity not exceeding 15 days, from the numerator of the reserve requirement ratio. The said ratio was to remain unchanged at 14% during the period as of 3/3/2003. Furthermore, the CBE licensed public sector banks to act as primary dealers in government bonds on the primary market. The CBE also set the rules governing the combination of the chairmanship and membership of the boards of both public sector banks and investment banks. Moreover, the CBE strengthened its instructions to banks so as to ensure the soundness of their investments; and banks’ compliance with the credit regulations stated in the Circular issued on Jan. 26, 2003.

With a view to regulating the Money Laundering Combating Unit (MLCU)

at the Central Bank, the Presidential Decree No. 28 of the year 2003 was issued, to determine the Unit's modus operandi and personnel systems. The Unit is be subject to the administrative and financial regulations applicable to the Central Bank, pending the issuance of its relevant regulations and systems. Furthermore, the CBE issued Anti-Money Laundering Regulations on Jan. 29, 2003 to be binding on all banks, exchange dealer and money transfer companies; in compliance with the Law put into effect as of March 1, 2003. Accordingly, the disclosure forms designed for the customers of these entities were distributed among banks' branches, insurance companies, all customs' ports and exchange dealer companies, to be sent to the Unit within three days from their filling in.

To facilitate dealing in the foreign trade sector after the floating of the

Egyptian pound, it was decided to fix the exchange rate of the customs dollar, and to keep it in effect for a month. In this context, the customs dollar is to be calculated according to the weighted average of the exchange rate of the US dollar and other foreign currencies; and the volume of transactions conducted monthly, as of the day following the elapse of this month.

Furthermore, some amendments were made to the structure of customs tariffs, covering 129 customs items pertaining to a list of 250 commodities used for manufacturing purposes. Also, new items were added to this list with a view to alleviating consumer burdens, encouraging local industry, and providing the

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necessary medical supplies to counter the increase in the price of medicines. Moreover, approval was granted to the organizational structure and job descriptions of the Central Unit and the branches of the Drawback and Rebate Department.

The Ministerial Committee for Privatization decided to offer for subscription

the public stake in 641 companies according to a gradual schedule of implementation. Initially, 30 companies are to be offered for anchor investors on the Stock Exchange.

Within the framework of the National Program of Lending for the Low-

income Bracket, the Ministry of Local Development approved the regulations governing the program for development of low-income family resources, according to preset criteria. This program is to be implemented in cooperation with the General Federation of the Chambers of Commerce, and in coordination with the Social Development Fund. This program is part of an integrated scheme for the family resources development in all the villages and districts of Egypt. The Council of Governors and the Prime Minister approved the finance of this program within the Economic and Social Plan (2002-2007). The program shall be phased in through the placement of bonds as of the 1st of June, 2003, and shall be initially launched in two villages selected nationwide, as of the beginning of the new fiscal year.

Moreover, the period witnessed the establishment of the first EIB Regional

Bureau in the Middle East, an arm of the EU policy to support development efforts in the Mediterranean area. Cairo was selected to be the location of the Bureau.

Annex (A) covers the decisions regarding the monetary policy and regulation

of banking activity.

A follow up of monetary and credit developments during the period July/March

of FY 2002/2003 reveals that domestic liquidity (M2) increased by 11.5% against

Summary of Main Domestic Developments

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10.2% during the corresponding period of the previous FY. When excluding the effect of exchange rate changes, this ratio decreases to 5.8% against 5.6%. Money supply (M1) grew by 7.0% against 5.6%. Concurrently, inflation rate increased to 3.6% during the period, up from 2.5% in the corresponding period.

The reduction of the CBE lending and discount rate on the 11th of Nov. 2002

(10% down from 11% per annum at end of June 2002) was reflected on the average annual interest rate at banks. The interest rate on three-month deposits declined to 8.12% at end of March 2003 from 9.42% at end of June 2002, and on one-year-or-less loans to 13.39% from 14.10%.

Interest rates on TBs took an upward trend, as those on 91-day TBs reached

13.593% annually at end of March 2003 against 7.198% at end of June 2002, and on 182-day TBs 12.184% annually against 7.651%. As for the reserve requirement ratio, the CBE decided to exclude the balances of treasury bills, with the remaining period of their maturity not exceeding 15 days, from the numerator of the said reserve ratio as of March 3, 2003. The reserve requirement ratio is to remain at its current level of 14%.

As regards the deposit acceptance mechanism, total deposits of banks

accepted by the Central Bank reached LE 39.5 billion at end of March 2003; with the interest rates ranging between 2.9% and 15.1%, and maturities between 6 and 28 days. Repos were used on a small scale during the period, accounting only for LE 4.4 billion down from LE 50.8 billion during the period of comparison.

Domestic liquidity rose by 11.5% during the period under review, as an

outcome of the increase in domestic credit by 8.3%; and in net foreign assets by 13.3%. This is in addition to a drop of 11.6% in the negative balance of the other items (net).

The increase in domestic credit was primarily ascribed to the escalation in

net government debt by 12.9%, representing 27.6% of total domestic credit at end of March 2003. Added to this is the increase in the credit to the private business sector by 5.5% to as much as 54.2% of the total; the public business sector by 13.8% to 9.1% and the household sector by 6.7% to 9.1% of the total.

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A follow-up of the financial position of the CBE during the period under review reveals an increase of LE 7.9 billion or 12.4% in its net domestic assets and of LE 0.2 billion or 1.5% in its net foreign assets.

According to the developments in the financial positions of banks (excluding

the Central Bank), assets and liabilities totaled about LE 569.1 billion at end of March 2003, with a rise of LE 73.6 billion or 14.9% against LE 64.4 billion or 15.0%.

On the liabilities side, deposits edged up by about LE 43.8 billion or 12.8%

to reach LE 384.7 billion or 67.6% of total liabilities at end of March 2003. Of this amount, deposits in local currency represented LE 267.4 billion and in foreign currencies the equivalent of LE 117.3 billion.

On the assets side, the increase was mainly due to a rise in banks' portfolio

investment (securities and treasury bills) by about LE 23.0 billion. This is attributed to the increase in treasury bills by about LE 12.6 billion, government bonds by about LE 8.6 billion and foreign securities by about LE 1.2 billion. Banks' investments in non-government bonds slightly rose by LE 0.8 billion. Meanwhile, banks' corporate equities retreated by about LE 0.2 billion. Accordingly, the value of portfolio investments (securities and bills) recorded about LE 110.7 billion, representing 19.5% of total assets.

Lending and discount balances granted by banks increased by about LE 15.5

billion or 5.8% during the period under review, to reach LE 281.6 billion. As such, these balances accounted for 49.5% of total assets and 73.2% of total deposits at end of March 2003.

Credit facilities (lending and discount) extended by banks in local currency

reached LE 217.6 billion during the period, contributing 77.3% of total facilities at end of March 2003. Facilities in foreign currencies totaled the equivalent of LE 64.0 billion or 22.7% of the total.

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Banks continued to reinforce their own resources. Equity rights increased by about LE 1.6 billion during the period to reach LE 25.4 billion, and provisions by about LE 3.8 billion to LE 39.7 billion at end of March 2003.

As for the transactions on the foreign exchange market, the deficit declined

to US$ 0.4 billion against US$ 2.7 billion during the corresponding period of the previous FY. The deficit was manifest in the transactions of the banking system, in contrast to the modest surplus realized by exchange dealer companies. Within the context of the floating of the Egyptian pound, the US dollar exchange rate against the Egyptian pound reached 573.5 pt at end of March 2003 against 462.6 pt at end of June 2002. Net international reserves with the CBE stood at US$ 14.1 billion at end of March 2003; almost the same level posted at end of June 2002.

Against a background of a worldwide uncertainty, especially in the Middle

East, the value of shares and bonds traded on the Stock Exchange retreated to LE 18.9 billion during the period under review against LE 25.9 billion in the corresponding period. The value of share transactions went down to 54.5% of the total against 62.7%. On the other hand, transactions in bonds increased, accounting for 45.5% of the total against 37.3% in the corresponding period.

CMA index -covering all corporate equities- moved up 26 points over end of

June 2002, to post 653.4 points at end of March 2003. CASE 30 (the new index established by the Stock Exchange to cover the most active and liquid 30 companies) climbed to 563.5 points at end of March 2003, compared with 472.1 points at end of June 2002.

Statistics on the foreign investors' transactions indicate a decline in the total

value of transactions to LE 4.9 billion during the period against LE 7.7 billion in the corresponding period. As for local mutual funds, the total nominal value of their documents increased to LE 3.4 billion at end of March 2003 against LE 3.1 billion at end of June 2002. This is ascribed to the success of financial institutions in taking advantage of the collective withdrawal from the market, to step in as buyers of securities at reasonable prices.

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As for the GDRs traded on London Stock Exchange, which constitute a portion of the shares of some companies operating in Egypt, the closing prices of most of them trended upwards during Jan. 2003. Later on, they took a downward trend during Feb. and March, 2003 similar to that of their share prices inside Egypt.

As concerns the fiscal policy, attention was paid to speeding up the

collection of sovereign revenues to help cover the planned current and capital expenditures of the State. Follow up of the implementation of the consolidated fiscal operations of the general government (the budget sector, NIB & GASC, and SIFs) during July/March of FY 2002/2003 reveals that total revenues including grants reached LE 73.5 billion or 64% of the total estimated for the whole fiscal year. Meanwhile, total expenditures including net lending amounted to about LE 92.8 billion, with an implementation ratio of 72% of the projected total. As revenues fell short of covering expenditures, the actual overall deficit during the period exceeded its estimates up to the end of the fiscal year, reaching about LE 19.3 billion or 4.8% of the GDP. The deficit was financed by banking and non-banking domestic sources that covered, as well, net repayments of domestic and external debt.

Implementation of the fiscal operations of the budget sector (the administrative system, local administration and service authorities) during the same period indicates that total revenues including grants reached LE 53.3 billion or 62.1% of the total projected for the year. On the other hand, total expenditures including net lending reached about LE 78.9 billion, with an implementation ratio of 70.7% of the estimated total for the year. This resulted in an overall deficit of LE 25.6 billion or 6.3% of GDP during the period.

The fiscal operations of the general government were reflected on domestic

debt. The government domestic debt increased by LE 25.2 billion over the level recorded at end of June 2002, to reach about LE 246.4 billion at end of March 2003. This stemmed from a rise of about LE 14.0 billion in TBs outstanding balance; of LE 2.5 billion in foreign currency treasury bonds with public sector commercial banks; and LE 2.2 billion in dollar denominated sovereign bonds held by resident financial institutions due to exchange rate changes. This is in addition to an increase of LE 6.0 billion in the government debt to the NIB, and a retreat of

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about LE 0.5 billion in the credit position of the net government balances with the banking system.

Debt of the public economic authorities reached LE 39.3 billion at end of

March 2003, with a decline of LE 1.8 billion below the level recorded at end of June 2002. This was ascribed to an improvement of around LE 4.1 billion in their net credit position with the banking system, as such exceeding their balances of borrowing from the NIB (LE 2.3 billion).

NIB resources totaled about LE 234.6 billion at end of March 2003, rising

by LE 6.3 billion over the level at end of June 2002. The NIB used 51.1% of total resources to finance government investments (administrative system, local administration and service authorities); and 21.0% to finance investments of the public economic authorities. The remainder 27.9% of the total was directed to the financing of its varied activities, namely, lending to holding companies and their affiliate units, concessional lending to housing projects, and corporate participations.

As for external transactions, the BOP current account unfolded a surplus of

US$ 714.1 million during the period under review, against US$ 299.1 million. This came as a result of the improvement in both the trade deficit and the service surplus, which surpassed the effects of the decline in net unrequited transfers.

Trade deficit narrowed by 5.3% as a result of an increase of 11.5% in

commodity export proceeds and a rise of 2.9% in import payments. The step-up in commodity exports was mainly ascribed to a 30.1% rise in oil exports to US$ 2.3 billion, while non oil exports rose by 2.3% to reach US$ 3.6 billion.

The surplus on the service balance surged by 22.5%, to reach US$ 3.5

billion, owing to an increase of 8.1% in service receipts and a decline of 1.4% in service payments. The increase in service receipts came as a combined outcome of the rise in travel receipts (due to the increase in the number of tourist nights), transportation (due to higher Suez Canal tolls), government receipts and others, on the one hand , and the drop in investment income, on the other. The decrease

- 9 - in service payments was a result of the decline in transportation and government payments by more than the rise in the payments for travel, investment income and other payments. Net unrequited transfers fell by 16.8% to US$ 2.6 billion during the period under review, due to the decline in official transfers by 46.5% and in private transfers by 7.0%.

Capital and financial transactions have revealed a net outflow of US$ 1733.1 million against US$ 94.2 million during the corresponding period of the previous FY. Due to the aforementioned developments in both the current, and capital and financial transactions during the period, the BOP overall deficit shrank to US$ 52.2 million down from US$ 674.4 million in the corresponding period of the previous FY.

With regard to international financing, resource inflows (net) have dropped

to US$ 696.2 million against US$ 2.2 billion during the period under review. This was due to the fact that the corresponding period data showed inflows of US$ 1.1 billion as investments of non-resident financial institutions in dollar denominated sovereign bonds issued by the Egyptian government at the beginning of the period at a value of US$ 1.5 billion. During the period under review, these institutions had sold a portion of their holdings of those bonds to resident financial institutions on the secondary market in the amount of US$ 272.5 million . In addition, most items of resource inflows (net) rolled back during the period, as net official grants retreated, and net portfolio investments in Egypt reversed to outflows of US$ 206.0 million in contrast to inflows of US$ 67.3 million. This was neither offset by the improvement in net flows of foreign direct investment by 49.0%, nor by the shift of net flows of loans and facilities from a net repayment of US$ 148.9 million to a net disbursement of US$ 227.4 million.

The outstanding debt balance (denominated in US dollar) totaled the

equivalent of US$ 28.7 billion at end of March 2003. As such, it rose by US$ 31.6 million above the level at end of June 2002, despite the net repayments of medium- and long-term loans and facilities and the decline in US dollar bonds during the period. Therefore, the debt increase was attributed to changes in the exchange rates of most currencies of borrowing vis-à-vis the US dollar.

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Distribution of Egypt's external debt by creditor as at end of March 2003, denotes that the volume of debt due to Paris Club members under bilateral loans (rescheduled and non-rescheduled) and suppliers’ and buyers’ credit represented 68.8% of the total. On the other hand, the debt owed to non-member countries under bilateral loans constituted 3.4% of the total. The debt due to international and regional institutions reached 17.2% of the total, 91.7% of which was owed by the public sector. Short-term loans reached US$ 2.1 billion or 7.3% of the total, of which 55.4% was obtained by the private sector.

Dollar denominated sovereign bonds retreated to US$ 681.1 million at end of

March 2003, compared with US$ 953.6 million at end of June 2002.This was explained by the fact that resident financial institutions had bought part of these bonds valued at US$ 272.5 million on the secondary market. The private sector unguaranteed debt declined by US$ 287.2 million, to US$ 255.2 million.

External debt service has increased by about US$ 263.5 million during

July/March 2003, basically as a result of the rise in principal repayments and the slight drop in interest payments. Consequently, the ratio of debt service/export proceeds of goods and services rose to 12.8% up from 11.9% in the corresponding period.

According to the statistics on the Egyptian cotton crop during the 2002/2003

season, the cultivated area expanded by 1.2%. However, production retreated by 7.9%, due to the decline in the average productivity per feddan. With the increase in the opening stock during this season, total supply went up to 8.0 million metric cantars, thus enabling the coverage of both domestic consumption and exportation. With a view to promoting the exports of cotton yarn, the government offered facilities to local mills during this season. Consequently, local mills' consumption of raw cotton since the beginning of the season till the end of March 2003 rose to 80.6% of the targeted quantity, up by 82.4% compared with the corresponding period, and by 5.4% over their consumption till the end of the previous season. Meanwhile, export commitments reached 3.4 million metric cantars, with a rise of 35.7% above the targeted quantities for the whole season, 113.2% over the corresponding period, and 55.8% above the commitments of the pervious season. Public business sector companies contracted upon 54% of total commitments,

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whereas the private sector accounted for the remainder. India, Italy and Switzerland were the main importing countries of Egyptian cotton during the period.

According to the CAPMAS, tourism flows to Egypt increased during the period

under review. The number of arrivals rose by 30.7%, and the number of tourist nights by departure by 19.8%. On the other hand, the average stay per tourist (night) dropped by 7.2% during the period under review. The group of the European markets was mainly behind the increase in total tourism inflows in terms of the number of arrivals and tourist nights by departure.

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

Monetary Aggregates

A follow up of monetary and banking developments during July/March of FY

2002/2003 has revealed a rise of 11.5% in domestic liquidity (M2) against 10.2% during the corresponding period of the previous fiscal year. When excluding the effect of exchange rate changes, the ratio of the period under review decreases to 5.8% against 5.6%. Money supply (M1) grew by 7.0% against 5.6%. Concurrently, annual CPI-based inflation rate rose to 3.6% during this period against 2.5% during the corresponding period.

On 11th of Nov. 2002, CBE lending and discount rate was cut to 10.0% annually, compared with 11.0% at end of June 2002. As a result, the annual average interest rate on three-month deposits dropped from 9.42% at end of June 2002 to 8.12% at end of March 2003; and on loans of one year or less from 14.10% to 13.39%.

CBE Lending and Discount Rate and Average Interest Rates

(% Annually)

2001

2002 2003 At End of

June March June March CBE lending & discount rate 11.00 11.00 11.00 10.00 3- month deposits 9.43 9.45 9.42 8.12 Loans of one year or less 13.57 13.59 14.10 13.39

With the increase in TB issues, interest rates on 91-day TBs rose to 13.593%

at end of March 2003, against 7.198% at end of June 2002, and on 182-day TBs from 7.651% to 12.184%.

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TB Interest Rates (% Annually)

2001 2002 2003 At End of

June March June March 91-day TBs 9.059 7.200 7.198 13.593 182-day TBs 9.077 7.718 7.651 12.184

As of March 4, 2003, it was decided to exclude the treasury bills, with the

remaining period of their maturity not exceeding 15 days, from the numerator of the reserve requirement ratio (banks' balances at the CBE). In addition, the reserve requirement ratio is to remain unchanged at its current level of 14%.

The outstanding balance of treasury bills increased by LE 14.0 billion or 35.0% during the period, against LE 6.3 billion or 21.5%, to reach LE 54.0 billion at end of March 2003. The nominal value of treasury bonds remained unchanged at LE 13.0 billion at end of March 2003; mostly held by banks (an amount of LE 11.3 billion or 86.9% of the total).

Outstanding Balances of Treasury

Bills and Bonds (LE bn)

2001 2002 2003 At End of

June March June March Bills, of which : 29.3 35.6 40.0 54.0 Banks’ holdings 29.0 35.3 39.7 53.6 Treasury Bonds 2003, of which: 4.0 4.0 4.0 4.0 Banks’ holdings 3.5 3.5 3.6 3.4 Treasury Bonds 2005, of which: 1.5 1.5 1.5 1.5 Banks’ holdings 1.4 1.4 1.3 1.5 Treasury Bonds 2006, of which : 0.5 0.5 0.5 0.5 Banks’ holdings 0.4 0.4 0.4 0.5 Treasury bonds 2009, of which: 4.0 4.0 4.0 4.0 Banks’ holdings 2.7 2.7 3.0 3.1 Treasury bonds 2007, of which: 3.0 3.0 3.0 3.0 Banks’ holdings 2.8 2.8 2.7 2.8

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Under the CBE deposit acceptance mechanism effective on September 17th, 2002, banks’ deposits at the CBE totaled LE 39.5 billion up to 31/3/2003. Interest rates on these deposits ranged between 2.9% and 15.1%, with maturities between 6 and 28 days.

During the period under review, the volume of TB repos conducted between

the CBE and some banks decreased to LE 4.4 billion compared with LE 50.8 billion during the corresponding period.

The central exchange rate of US dollar against the Egyptian pound ceased to

be applied. Moreover, the Executive Regulations of the Law No. 38 of the year 1994 Regulating Dealing in Foreign Exchange were amended. Accordingly, authorized banks are allowed to carry out freely foreign exchange transactions as per their purchase and selling rates, as of 29/1/2003. At the same time, these exchange rates should be clearly announced in all their branches. Moreover, the Central Bank is to announce daily its foreign exchange rates according to the weighted average of banks’ rates, declared by the CBE Forex Statistics Chamber in the free market.

This was reflected on the Egyptian pound exchange rate which reached 573.4

pt/dollar at end of March 2003. The CBE’s net international reserves stood at US$ 14.1 billion at end of March 2003, almost the same level of the end of June 2002.

In order to build up internationally and nationally competitive banking

entities, the Central Bank of Egypt has acted to strengthen the banks' capital and encourage voluntary mergers. As such, merger of Agricultural Credit and Development banks (17) in all governorates was approved on the 1st of March 2003, bringing their number to only 6 banks.

Within the context of improving banking performance, the period initiated the

expansion in e-banking to keep pace with international levels. The CBE has licensed five banks and two branches of foreign banks to exercise e-banking.

As for combating money laundering, the CBE Board of Directors approved in

its session, 29/1/2003, the regulations that banks are to comply with as required by

- 15 - the Anti-money Laundering Law. These regulations replace those formerly issued by the Board and stated in the Circular dated 21/6/2002, regarding opening accounts and exercising banking operations. Annex (A) clarifies in detail the new regulations.

In order to ensure the soundness of banks’ investments, the CBE reiterated the

necessity of compliance with credit regulations issued beforehand by its Board on 14/11/2002. As such, banks are required to continue to refrain from granting credit facilities or financing in foreign currencies, unless the bank ascertains that the client has adequate foreign currency earnings that he pledges to use for repayment. Banks were also prohibited from granting credit facilities in local currency against letters of guarantee whether issued by local banks or banks abroad. An exemption was made for the facilities granted in local currency to foreign companies working in Egypt against LGs issued by banks abroad. Furthermore, banks were prohibited from granting LE facilities guaranteed by foreign currency deposits (regardless of the type) or foreign currency bonds.

1/1/1: Reserve Money

Reserve money augmented by LE 8.1 billion or 10.9% during the period under review, mounting to LE 81.8 billion at end of March 2003. This was a result of a LE 4.2 billion rise in money in circulation outside the CBE, and of LE 3.9 billion in banks’ LE deposits at the CBE.

- 16 -

Reserve Money and Counterpart Assets (LE mn)

Change During July/March

2001/2002 2002/2003

Balances at End of

March 2003 Value % Value %

A- Reserve Money 81826 2043 2.9 8054 10.9 - Money in circulation outside the CBE 49560 3117 7.7 4184 9.2

- Banks’ deposits in local currency 32266 (1074) (3.7) 3870 13.6 B- Counterpart Assets 81826 2043 2.9 8054 10.9 Net Foreign Assets 9964 (845) (6.5) 148 1.5

Foreign Assets 77529 6345 11.8 15635 25.3 Gold 2568 - 0.0 - 0.0

Foreign securities 16315 3209 32.5 2694 19.8 Foreign currencies 58646 3136 7.5 12941 28.3 Foreign Liabilities 67565 7190 17.7 15487 29.7 Net Domestic Assets 71862 2888 5.1 7906 12.4 Claims on Government (Net) 74174 8047 12.4 2849 4.0 Claims, of which: 132366 19974 20.3 14834 12.6 Government securities 95771 (175) (0.2) (2741) (2.8)

Deposits 58192 11927 35.9 11985 25.9 Claims on Banks (Net) -33687 (8333) 82.9 (16000) 90.5 Claims 8639 15 0.2 (1653) (16.1) Foreign currency deposits 42326 8348 41.4 14347 51.3

Other Items (Net) 31375 3174 159.1 21057 204.1 Assets 40362 7143 75.5 21949 119.2 Liabilities, of which: 8987 3969 53.2 892 11.0 Equities 1500 - 0.0 (4000) (72.7)

Provisions 293 (81) (21.1) (4) (1.3)

The higher reserve money reflected the escalation in net domestic assets and net foreign assets. Net domestic assets increased by LE 7.9 billion, in part because of an increase of LE 21.1 billion in other items (net), and LE 2.8 billion in the CBE's net claims on the government, whereas the CBE's net claims on banks decreased by LE 16.0 billion.

The escalation in the CBE's net claims on the government was ascribed to the

increase in the CBE's claims thereon by LE 14.8 billion. The increase was largely offset by a rise of LE 12.0 billion in government deposits at the CBE. On the other

- 17 - hand, the retreat in the CBE's net claims on banks resulted from the increase in banks' foreign currency deposits with the CBE by the equivalent of LE 14.3 billion (mainly due to the change in the exchange rate), and the decline in its claims thereon by LE 1.7 billion.

As for the CBE's net foreign assets, they went up during the period by the

equivalent of LE 0.2 billion. This slight increase emanated from a pickup in foreign assets by the equivalent of LE 15.7 billion; and a rise in foreign obligations, mostly representing revaluations of rescheduling accounts, by the equivalent of LE 15.5 billion.

1/1/2 : Banknote Issue

Banknote issue (including subsidiary coins) increased by LE 4.5 billion or 10%

during the period, to LE 50.2 billion at end of March 2003.

Banknote Issue* (LE mn)

Annual Change Change During

July/March At End of Balance of Note Issue Value % Value %

June 2000 37939 2265 6.3 March 2001 40320 2768 7.4 2381 6.3 June 2001 41008 3069 8.1 March 2002 44436 4116 10.2 3428 8.4 June 2002 45633 4625 11.3 March 2003 50180 5744 12.9 4547 10.0

* Including subsidiary coins issued by the Ministry of Finance.

The increase in banknote issue led, in turn, to a parallel increase of LE 4.1 billion or 9% in the currency in circulation outside the CBE, reaching LE 49.5 billion at end of March 2003.

- 18 -

A breakdown of the relative structure of currency in circulation by denomination shows the increase of the relative importance of the LE 50 note to 37.4% at end of March 2003, against 32.9% at end of June 2002. The relative importance of pt 25, pt 50 and LE 1 denominations remained unchanged, whereas that of LE 10, LE 20 and LE 100 denominations retreated.

Currency in Circulation Outside the CBE* (LE mn)

June 2002 March 2003 Change During July/March Denominations

Value Relative

ImportanceValue

Relative Importance 2001/2002 2002/2003

Total 45377 100.0 49481 100.0 7.7 9.0 Subsidiary Coins 206 0.5 211 0.4 2.5 2.4 PT 25 126 0.3 143 0.3 15.9 13.5 PT 50 221 0.5 246 0.5 7.2 11.3 LE 1 422 0.9 470 0.9 11.5 11.4 LE 5 1034 2.3 1087 2.2 (8.8) 5.1 LE 10 5718 12.6 5752 11.7 1.7 0.6 LE 20 11948 26.3 11849 23.9 3.4 (0.8) LE 50 14938 32.9 18505 37.4 1.2 23.9 LE 100 10764 23.7 11218 22.7 30.4 4.2

* Representing the difference between the banknote issue and cash at the CBE's vaults to facilitate the performance of its operations.

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

A follow up of the statistics of the clearing houses in Cairo, Alexandria and

Port Said during July/March 2002/2003 has shown an increase in the number of exchanged cheques; however, their value was lower than the corresponding period of the previous FY. Hence, the number of cheques amounted to 7.6 million, with a lower value totaling LE 184.3 billion, against 5.8 million cheques with a total value of LE 206.5 billion. This resulted in a fall in the average value per cheque to LE 24.2 thousand during the relevant period against LE 35.4 thousand in the corresponding period.

- 19 -

CBE Clearing Houses Activity

Number of Cheques

Value of Cheques

Change

(000’s) (LE mn) Number Value 1997/98 8102 323960 1.4 20.4 1998/1999 8377 350246 3.4 8.1 1999/2000 8555 338083 2.1 (3.5) 2000/2001 8228 292168 (3.8) (13.6) 2001/2002 7918 270543 (3.8) (7.4) July/March 2001/2002 5828 206471 (6.1) (6.1) July/ March 2002/2003 7623 184279 30.8 (10.7)

Statistics of the SWIFT local service during the period have revealed a surge

in the value of carried out transfers by LE 56.1 billion to reach LE 762.6 billion. Nonetheless, their number dropped by 109.7 thousand to 159.4 thousand.

SWIFT Local Service Activity

(LE mn) Executed Transfers Change During the Period

Number Value Number Value FY 2000/2001 240805 626356 FY 2001/2002 376658 996799 135853 370443 July/March 2001/2002 269115 706547 July/ March 2002/2003 159397 762624 (109718) 56077

1/1/4: Domestic Liquidity and Affecting Factors

Domestic liquidity (M2) rose by LE 37.8 billion or 11.5% during July/March

of FY 2002/2003, against LE 29.0 billion or 10.2% during the corresponding period, to stand at LE 366.6 billion at end of March 2003. However, the increase retreats to 5.8% against 6.0%, when excluding the effect of change in the exchange rate.

- 20 -

Domestic Liquidity Structure (LE mn)

Change During July/March End of March 2003 2002/2003 2001/2002

% Value % Value

Relative Importance

Balances

11.53783310.2 28985100.0 366561 Domestic Liquidity 7.041615.6 300417.5 63966 Money Supply

9.038006.7 254312.6 46099 - Currency in circulation outside the banking system

2.13613.0 4614.9 17867 - Local currency demand deposits 12.53367211.2 2598182.5 302595 Quasi-Money

6.3120747.4 1268655.9 204792 -Time and Saving Deposits in Local Currency

28.32159821.9 1329526.7 97803 - Foreign Currency Deposits 38.2316219.3 13033.1 11429 - Demand deposits 27.11843622.2 1199223.6 86374 - Time and saving deposits

The rise in domestic liquidity during the period has reflected an increase in

both money supply (M1) and quasi-money. Money supply went up by LE 4.2 billion or 7.0%, to reach LE 64.0 billion or 17.5% of total domestic liquidity at end of March 2003.

The pickup in money supply came as an outcome of a growth of LE 3.8

billion or 9.0% in the currency in circulation outside the banking system; and a rise of LE 0.4 billion or 2.1% in local currency demand deposits, particularly those of the household and the private business sectors.

- 21 -

Quasi-money increased by about LE 33.7 billion or 12.5% during the period under review, to LE 302.6 billion or 82.5% of total domestic liquidity at end of March 2003. The increase was due to a growth in LE time and saving deposits and foreign currency deposits. LE time and saving deposits increased by LE 12.1 billion or 6.3% to reach LE 204.8 billion, representing 55.9% of total domestic liquidity at end of March 2003. This was attributed to a rise of LE 13.7 billion in the deposits of the household sector. The increase was curbed, though, by the decline in the public and private business sectors' deposits by LE 1.6 billion.

Deposits in foreign currencies (demand and time & saving) increased by the

equivalent of LE 21.6 billion or 28.3% (3.5% when excluding the effect of the change in the exchange rate), to the equivalent of LE 97.8 billion.

The aforementioned rise was due to the increases in deposits of the household

sector, the private business sector and the public business sector by the equivalent of LE 15.8 billion, LE 5.1 billion, and LE 0.7 billion, respectively.

Domestic Liquidity(End of March)

0

40

80

120

160

200

240

280

320

360

400

2000 2001 2002 2003

Foreign currenciesdeposits

Time & savingdeposits in localcurrency

Currency incirculation outsidethe banking system

Demand deposits inlocal currency

L.E. bn

- 22 -

0

40

80

120

160

200

240

280

320

360

1995 1996 1997 1998 1999 2000 2001 2002 2003

Non-Government Deposits at Banks(End of March)

LE bn

Foreign currencies

Local currency

It is to be noted that local currency deposits have represented the majority of total deposits, constituting 69.5% of the total at end of March 2003. Foreign currency deposits accounted for the remainder 30.5% of total deposits.

Counterpart Assets of Domestic Liquidity (LE mn)

Change During July/March End of March 2003 2002/2003 2001/2002

% Value % Value

Relative

Importance

Balances

11.537833

10.2 28985100.0366561Counterpart Assets of Domestic Liquidity

13.323052.6 4925.319590Net Foreign Assets 1.5148(6.5) (846)2.79964- With the CBE

28.9215722.5 13382.69626- With other banks 8.3298689.5 30537106.4389958Domestic Credit

12.91227411.3 942429.4107697 Government (net) 13.843027.5 21959.735445 Public business sector 5.5110729.4 1682557.6211302 Private business sector 6.722206.8 20939.735514 Household sector

(11.6)56603.7 (2044)-11.7-42987Other items (Net)

- 23 -

As for counterpart assets of domestic liquidity, both domestic credit and net foreign assets increased, whereas the negative balance of other items (net) decreased.

Domestic credit increased by LE 29.9 billion or 8.3% during the period, to LE

390.0 billion at end of March 2003. This was mainly due to the rise in the net indebtedness of the government by LE 12.3 billion or 12.9%, bringing its debt balance to LE 107.7 billion at end of March 2003, of which LE 74.2 billion represented CBE's claims on the government.

The private business sector received about 37.1% of the increase in total

credit during the period, as its share rose by LE 11.1 billion or 5.5%, bringing its debt to banks to LE 211.3 billion. A breakdown of the credit granted to the private business sector shows that its units in the area of services obtained LE 4.7 billion, trade LE 3.2 billion and the manufacturing sector LE 2.4 billion. By contrast, credit to the agriculture sector decreased by about LE 0.1 billion.

Credit to the public business sector increased by LE 4.3 billion, resulting in a

higher indebtedness to banks of LE 35.4 billion. Credit to the household sector increased by LE 2.2 billion, raising its debt balance to banks to LE 35.5 billion.

Domestic Credit (By Sector)(End of March)

0

40

80

120

160

200

240

280

320

360

400

2000 2001 2002 2003

Government (net)

Private businesssector

Public businesssector

Household sector

L.E. bn

- 24 -

In the light of the above-mentioned developments, it is observed that 54.2% of total domestic credit went to the private business sector at end of March 2003, followed by the government sector with 27.6%, the public business sector with 9.1% and the household sector with 9.1%.

Net foreign assets of the banking system rose by the equivalent of LE 2.3

billion or 13.3% during the period, posting the equivalent of LE 19.6 billion at end of March 2003. The improvement is attributable to the growth in net foreign assets of business and investment banks by the equivalent of LE 3.0 billion, and of CBE by the equivalent of LE 0.1 billion. However, net foreign assets of commercial banks retreated by the equivalent of LE 0.7 billion, and of specialized banks by the equivalent of LE 0.1 billion.

Net Foreign Assets of the Banking System

(LE mn)

The negative balance of other items (net) dropped by LE 5.7 billion during the

period under review, against a rise of LE 2.0 billion in the corresponding period, to post about LE 43.0 billion at end of March 2003.

June 2002 March 2003 Foreign Foreign

Change in Net During July/March

Assets Liabilities Net Assets Liabilities Net 2001/02 2002/03 Total 90125 72840 17285 112383 92793 19590 492 2305 -CBE 61894 52078 9816 77529 67565 9964 (846) 148 -Commercial banks 19437 16555 2882 22812 20684 2128 (898) (754) -Business and investment banks

8736

3462

5274

11932

3673

8259

2376

2985

-Specialized banks 58 745 -687 110 871 -761 (140) (74)

- 25 -

1/2- Banking Developments

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

According to banking statistics for the period July/March of the FY

2002/2003, the bank's aggregate financial position reached LE 569.1 billion at the end of March 2003, with a rise of LE 73.6 billion or 14.9% against LE 64.4 billion or 15.0% during the corresponding period.

This rise came because of an increase in the financial position of commercial

banks by LE 58.0 billion or 14.8%, constituting 78.8% of the aggregate financial position at the end of March 2003. The position of business and investment banks came next with LE 9.9 billion or 13.7%, accounting for 14.4% of banks' aggregate financial position, followed by specialized banks' with LE 5.7 billion or 17.5%, representing 6.8%.

Aggregate Financial Positions of Banks (LE mn)

Commercial

Banks

Business & Investment

Banks Specialized

Banks All Banks At End of March 2003 June

2002 March 2003

Cash 4302 923 220 4453 5445 Securities & investments 100344 9062 1338 87726 110744 Balances with banks abroad 14477 10471 102 20002 25050 Balances with CBE 64076 9672 1124 57576 74872 Balances with local banks 19234 6243 407 25669 25884 Loan & discount balances 211570 39300 30770 266100 281640 Other assets 34491 6340 4611 33939 45442 (Assets = Liabilities) 448494 82011 38572 495465 569077 Capital 7436 4433 1793 12531 13662 Reserves 9928 1286 505 11238 11719 Provisions 30062 6463 3141 35869 39666 Bonds & long-term loans 9972 2451 2367 14057 14790 Obligations to banks abroad 12381 2741 60 11831 15182 Obligations to CBE 3330 3402 3296 11277 10028 Obligations to local banks 15517 3479 4817 23817 24713 Deposits 318217 50172 16266 340868 384655 Other liabilities 41651 6684 6327 33977 54662

- 26 -

The following factors resulted in a growth in liabilities. Deposits increased by LE 43.8 billion to reach LE 384.7 billion or 67.6% of the total at the end of March 2003. Other liabilities increased by LE 20.7 billion, and obligations to banks abroad by LE 3.3 billion. In the meantime, provisions climbed by LE 3.8 billion to reach LE 39.7 billion, constituting 7.0% of total liabilities, and 14.1% of total loan and discount balances at the end of March 2003. Equities augmented by LE 1.6 billion, posting LE 25.4 billion or 4.5% of the total. Obligations to local banks rose by LE 0.9 billion and bonds and long-term loans by LE 0.7 billion. Conversely, obligations to the CBE retreated by LE 1.2 billion.

The rise in assets is attributed to an increase of LE 23.0 billion in portfolio

investment, to reach LE 110.7 billion or 19.5% of total assets; and in balances at the CBE by LE 17.3 billion. Other affecting factors were increases in loan and discount balances by LE 15.5 billion, to reach LE 281.6 billion, representing 49.5% of total assets and 73.2% of total deposits at the end of March 2003. In addition, other assets escalated by LE 11.5 billion and balances with banks abroad by LE 5.0 billion and with local banks by LE 0.2 billion.

It is noteworthy that the rise in banks' portfolio investment resulted from the

growth in investment in treasury bills by LE 12.6 billion, government bonds by LE 8.6 billion and foreign securities by LE 1.2 billion. On the other hand, banks' investments in non-government bonds slightly increased by LE 0.8 billion, while in corporate equities they retreated by LE 0.2 billion.

Against this background, the relative portfolio structure consisted of 47.3% in

treasury bills, 29.8% in government bonds, 13.5% in corporate equities, 5.3% in foreign securities and 4.1% in non-government bonds, at the end of March 2003.

- 27 -

Portfolio Structure (%)

June 2002 March 2003 At End of In

Local Currency

In Foreign

Currencies Total

In Local

Currency

In Foreign

Currencies Total Local Investments 76.4 18.4 94.8 76.3 18.4 94.7Treasury bills 45.3 - 45.3 47.3 0.0 47.3Government bonds 13.7 14.2 27.9 14.7 15.1 29.8Non-government bonds 4.3 0.0 4.3 4.0 0.1 4.1Corporate equities 13.1 4.2 17.3 10.3 3.2 13.5Foreign Securities - 5.2 5.2 - 5.3 5.3Total 76.4 23.6 100.0 76.3 23.7 100.0Total Portfolio (LE bn) 67.0 20.7 87.7 84.5 26.2 110.7

As for the transactions of banks in Egypt with their correspondents abroad,

net transactions picked up by the equivalent of LE 1.7 billion or 20.8% during the period of review, bringing their net deposits to LE 9.9 billion at the end of March 2003. This is due to a rise of LE 5.0 billion in banks' balances abroad, i.e. by more than the rise of what is worth LE 3.3 billion in their obligations to banks abroad.

Transactions with Banks Abroad

(LE mn) Commer-

cial Banks

Business & Investment

Banks

Specialized Banks All Banks

At End of March 2003 June 2002 March 2003 Net Position 2096 7730 42 8171 9868 Balances with banks abroad 14477 10471 102 20002 25050 Obligations to banks abroad 12381 2741 60 11831 15182

1/2/2: Interbank Money Market in Egypt

During the period under review, the volume of transactions in the interbank

money market -in terms of deposits- reached about LE 25.9 billion at the end of March 2003, compared with LE 25.7 billion at the end of June 2002. This posted a rise of LE 0.2 billion. The growth of LE 3.7 billion worth in foreign currency deposits and the decrease of LE 3.5 billion in local currency deposits were behind the said rise.

- 28 -

Interbank Money Market in Egypt (LE mn)

Change During July/March

The Volume of the Market

(Deposit Balances) 2001/2002 2002/2003

June 2002 March 2003 Value Value Total 25669 25884 5813 215 Balances in Local Currency 17036 13566 3742 (3470) Commercial banks 14597 10693 3814 (3904) Business & investment banks 2032 2493 (73) 461 Specialized banks 407 380 1 (27) Balances in Foreign Currencies 8633 12318 2071 3685 Commercial banks 5954 8541 1530 2587 Business & investment banks 2621 3750 576 1129 Specialized banks 58 27 (35) (31)

1/2/3: Deposits

Deposits at banks -including government deposits- increased by LE 43.8 billion or 12.8% during the period of July/March of the FY 2002/2003, against LE 34.6 billion or 11.9% during the same period of the previous FY. As a consequence, the deposit balance totaled about LE 384.7 billion at the end of March 2003. The growth in deposits at banks emanated from the increase in local and foreign currency deposits. LE deposits rose by LE 17.2 billion or 6.9%, posting LE 267.4 billion or 69.5% of the total, whereas foreign currency deposits went up by the equivalent of LE 26.6 billion or 29.2% to reach LE 117.3 billion worth or 30.5% of total deposits at the end of March 2003. Commercial banks attracted the bulk of deposits (82.7% of the total). Business and investment banks came next with 13.1%, followed by specialized banks with a share of 4.2% at the end of March 2003.

Time and saving deposits, both in local and foreign currencies, constituted the majority of deposits, contributing LE 325.9 billion or 84.7% of the total at the end of March 2003. LE time and saving deposits accounted for LE 232.0 billion, up by LE 18.6 billion, while foreign currency deposits contributed the equivalent of LE 93.9 billion, with a rise of LE 20.3 billion worth during the period.

- 29 -

Banks’ Deposits (by Type and Currency) (LE mn)

Com-mercial Banks

Business & Invest-

ment Banks

Special-

ized Banks All Banks

At End of March 2003 June 2002 March 2003

ValueRelative Impor-tance

Value Relative Impor-tance

Total Deposits 318217 50172 16226 340868 100.0 384655 100.0 In Local Currency 224043 27516 15795 250106 73.4 267354 69.5

Demand 17326 3533 970 21063 6.2 21829 5.7 Time and saving 194551 22739 14715 213385 62.6 232005 60.3 Blocked or retained

12166

1244

110

15658

4.6

13520

3.5

In Foreign Currencies 94174 22656 471 90762 26.6 117301 30.5

Demand 9641 3653 3 9850 2.9 13297 3.5 Time and saving 76663 16724 466 73567 21.6 93853 24.4 Blocked or retained

7870

2279

2

7345

2.1

10151

2.6

Non-government LE time and saving deposits at commercial as well as

business and investment banks reached LE 153.3 billion at the end of March 2003, with a slight rise of LE 0.8 billion or 0.5%, against LE 3.3 billion or 2.3% in the corresponding period. This is principally ascribed to the growth of LE 5.8 billion in saving account deposits and in deposits of less than one month and of 6 months to one year by LE 1.3 billion. There was a growth of LE 1.0 billion in other deposits. The increase was largely offset by the drop in the one to three months, three to six months, and more than one year deposits by LE 5.6 billion and the blocked deposits by LE 1.7 billion.

The balances of the saving systems at these banks posted LE 44.5 billion at

the end of March 2003, rising by LE 17.1 billion or 62.5% during the period, against LE 9.4 billion or 56.0% in the corresponding period. This came as a result of the rise in deposits of three years and more by LE 16.5 billion and of less than three years by LE 0.6 billion.

- 30 -

Time and Saving Deposits and Saving Systems with

Commercial and Business & Investment Banks (by Maturity)

(LE mn) Balances at End of Change During

July/March June 2002 March 2003 2002/2003

Com-mercial Banks

Busi-ness & Invest-ment

Banks

Com-mercial Banks

Business &

Invest- ment

Banks

Value %

Total(1+2) 160519 19355 176112 21655 17893 9.9 1- Non-Gov. Time & Saving

Deposits in Local Currency, of which: 138306 14216 140770 12540 788 0.5

a. Free Deposits . Within one month 12724 3080 14566 2509 1271 8.0 . From one to 3 months 27488 5816 25007 4587 (3710) (11.1) . From 3 to 6 months 11037 1242 10348 1057 (874) (7.1) . From 6 months to one year 4342 238 4415 272 107 2.3 . More than one year 2999 962 1846 1075 (1040) (26.3) b- Blocked Deposits 9064 1324 7802 855 (1731) (16.7) c- Saving Accounts 69608 1417 75255 1540 5770 8.1 d- Others 1044 137 1531 645 995 84.3 2- Saving Systems 22213 5139 35342 9115 17105 62.5 Less than 3 years 8666 19 9281 14 610 7.0 3 years or more 13547 5120 26061 9101 16495 88.4

Sectoral distribution of LE deposits shows that a rise of LE 17.2 billion during

the period was concentrated in the deposits of the household and government sectors. The household sector was the main contributor to this increase, with a share of LE 14.3 billion or 8.6% to reach about LE 180.0 billion or 67.3% of the total at the end of March 2003. The government sectors' deposits rose by about LE 5.2 billion or 13.5% to reach LE 43.8 billion or 16.4% of the total, and so did those of the foreign sector by LE 0.1 billion. Conversely, the private business sector's deposits retreated by about LE 1.5 billion and the public business sector's by LE 0.9 billion.

- 31 -

Banks’ Deposits in Local Currency (by Sector)

(LE mn)

Commer-cial Banks

Business & Investment

Banks Specialized

Banks All Banks

At End of March 2003 June 2002 March 2003Total 224043 27516 15795 250106 267354 Government sector 39375 2895 1532 38578 43802 Public business sector 9656 2011 1372 13930 13039 Private business sector 20838 7256 1994 31594 30088 Household sector 153911 15163 10897 165648 179971 Foreign sector 263 191 - 356 454

Deposits in local currency with Banks

(End of March)

0

40

80

120

160

200

240

280

320

2000 2001 2002 2003

Foreign sector

Household sector

Private businesssectorPublic businesssector

Governmentsector

L.E. bn

Sectoral distribution of the foreign currency deposits shows a rise equivalent to LE 26.6 billion during the period. The household sector accounted for the bulk of this rise. Deposits of this sector increased by the equivalent of LE 15.8 billion or 28.8% to reach the equivalent of LE 70.6 billion or 60.2% of total foreign currency deposits at the end of March 2003. The deposits of the government sector rose by the equivalent of the LE 5.3 billion or 39.5%. Deposits of the private business sector increased by the equivalent of LE 5.1 billion, and the public business sector's by the equivalent of LE 0.7 billion. By contrast, deposits of the foreign sector decreased by the equivalent of LE 0.3 billion.

- 32 -

Banks’ Deposits in Foreign Currencies (by Sector)

(LE mn)

Commer- cial Banks

Business & Investment

Banks Specialized

Banks All Banks

At End of March 2003 June 2002 March 2003Total 94174 22656 471 90762 117301 Government sector 16010 2566 18 13328 18594 Public business sector 1941 938 7 2194 2886 Private business sector 16746 7656 82 19426 24484 Household sector 59120 11317 120 54775 70557 Foreign sector 357 179 244 1039 780

Deposits in foreign currencies with Banks

( End of March)

0

20

40

60

80

100

120

140

2000 2001 2002 2003

Foreign sector

Householdsector

Private businesssector

Public businesssector

Governmentsector

L.E. bn

1/2/4: Lending Activity

Banks' lending and discount balances reached LE 281.6 billion at the end of

March 2003, with an increase of LE 15.5 billion or 5.8% during the period against LE 20.9 billion or 8.7% in the corresponding period. This came as a result of the increase in credit facilities in local currency by LE 4.6 billion or 2.2%, to reach LE

- 33 - 217.6 billion or 77.3% of the total at the end of March 2003, and in foreign currencies by the equivalent of LE 10.9 billion or 20.6% to LE 64.0 billion worth or 22.7% of the total.

The breakdown of the relative structure of credit facilities granted up to the

end of March 2003 denoted that commercial banks extended the bulk (LE 211.6 billion or 75.1% of the total). They were followed by business and investment banks, which granted about LE 39.3 billion or 14.0% of total facilities, and specialized banks followed them with LE 30.7 billion or 10.9%.

Credit Granted by Banks*

(LE mn) Balances at End of Change During

June 2002 March 2003 July/March 2001/2002 2002/2003

Value Relative Impor-tance

Value Relative Impor-tance Value Value

Total 266100 100.0 281640 100.0 20941 15540 Credit in local currency

213008

80.0

217605

77.3

15378

4597

Credit in foreign currencies

53092

20.0

64035

22.7

5563

10943

*Including commercial papers discounting operations.

A breakdown of the increase in LE credit facilities by beneficiary sector during the period reveals that most facilities went to the household sector, with a share of LE 2.2 billion, bringing its debt to LE 34.4 billion or 15.8% of total facilities in local currency at the end of March 2003. Next came the private business sector, which received LE 1.8 billion to raise its debt to LE 146.3 billion or 67.2%. The public business sector received LE 1.7 billion, raising its debt balance to LE 27.5 billion or 12.6%. Credit facilities to the government sector and the foreign sector retreated by LE 0.9 billion, and LE 0.2 billion, respectively.

- 34 -

Local Currency Credit (by Borrowing Sector)

(LE mn)

Commer-cial Banks

Business & Investment

Banks Specialized

Banks All Banks

At End of March 2003 June 2002 March 2003 Total 159947 27589 30069 213008 217605 Government sector 4386 2720 1921 9901 9027 Public business sector 25701 1015 778 25831 27494 Private business sector 113411 20357 12517 144446 146285 Household sector 16090 3474 14851 32225 34415 Foreign sector 359 23 2 605 384

The breakdown of the foreign currency credit facilities by the borrowing sector at the end of March 2003, shows that the increase was chiefly in the private business sector with a share of 77.4%. Consequently, its debt towards banks escalated by the equivalent of LE 8.5 billion or 20.8% to reach LE 49.1 billion. The public business sector came second with a share equivalent to LE 2.8 billion or 55.2%, running up a debt of LE 7.9 billion. On the other hand, a drop was noticed in foreign currency credit facilities to the government sector by the equivalent of LE 0.3 billion, to the household sector by the equivalent of LE 29 million and to the foreign sector by the equivalent of LE 23 million.

Foreign Currency Credit

(by Borrowing Sector) (LE mn)

Commer-cial Banks

Business & Investment

Banks Specialized

Banks All Banks

At End of March 2003 June 2002 March 2003Total 51623 11711 701 53092 64035 Government sector 3912 422 - 4661 4334 Public business sector 6848 1005 - 5060 7853 Private business sector 38754 9686 701 40670 49141 Household sector 803 296 - 1070 1099 Foreign sector 1306 302 - 1631 1608

- 35 -

A breakdown of credit facilities by economic activity shows that the manufacturing sector received 34.9% of total facilities at the end of March 2003; the services sector obtained 28.3%; the trade sector 21.6%; unclassified sectors 13.4% and the agriculture sector 1.8%.

Credit

(by Economic Activity) (LE mn)

Commer- cial Banks

Business & Investment

Banks Specialized

Banks All Banks

At End of March 2003 June 2002 March 2003 Total 211570 39300 30770 266100 281640 Agriculture 3704 644 812 5716 5160 Manufacturing 81677 14032 2588 93739 98297 Trade 48888 10527 1290 56426 60705 Services 58586 9966 11228 74422 79780 Unclassified sectors (including the household)

18715

4131

14852

35797

37698

The rise in LE credit facilities was concentrated in the services and trade

sectors, as they received LE 2.2 billion and LE 1.5 billion respectively. Conversely, the shares of the agriculture and manufacturing sectors decreased by LE 0.7 billion and LE 0.3 billion, consecutively.

Local Currency Credit (by Economic Activity)

(LE mn)

Commer-cial Banks

Business & Investment

Banks Specialized

Banks All Banks

March 2003ِAt End of June 2002 March 2003Total 159947 27589 30069 213008 217605 Agriculture 3272 408 802 5166 4482 Manufacturing 61628 9184 2106 73178 72918 Trade 40043 7381 1290 47251 48714 Services 38405 7083 11019 54325 56507 Unclassified sectors (including the household) 16599 3533 14852 33088 34984

- 36 -

During the period, foreign currency credit to all economic activity sectors went up. The manufacturing sector obtained the major part, driving its debts up by the equivalent of LE 4.8 billion. Concurrently, the debt of the services sector scaled up by the equivalent of LE 3.2 billion; the trade sector's by the equivalent of LE 2.8 billion and the agriculture sector's by the equivalent of LE 0.1 billion.

Foreign Currency Credit (by Economic Activity)

(LE mn)

Commer-cial Banks

Business & Investment

Banks Specialized

Banks All Banks

March 2003ِAt End of June 2002 March 2003 Total 51623 11711 701 53092 64035 Agriculture 432 236 10 550 678 Manufacturing 20049 4848 482 20561 25379 Trade 8845 3146 - 9175 11991 Services 20181 2883 209 20097 23273 Unclassified sectors (including the household) 2116 598 - 2709 2714

A breakdown of loans and advances by maturity indicates that loans of more

than one year increased by LE 8.5 billion or 8.5% to reach LE 109.1 billion or 39.0% of the total at the end of March 2003. Of this amount, LE 78.7 billion were in local currency.

Loans and Advances (by Maturity and Currency)*

(LE mn)

Commercial Banks

Business & Investment

Banks Specialized

Banks All Banks

Aِt End of March 2003 June 2002 March 2003Total 210769 38576 30769 264261 280114 One year or less 128902 28030 14073 163683 171005 In local currency 105441 18875 13796 136001 138112 In foreign currencies 23461 9155 277 27682 32893 More than one year 81867 10546 16696 100578 109109 In local currency 54232 8168 16272 76079 78672 In foreign currencies 27635 2378 424 24499 30437

* Excluding commercial papers discounting operations.

- 37 - Short-term loans and advances (one year or less) rose by LE 7.3 billion or 4.5% to reach LE 171.0 billion or 61.0% of the total. Of this amount, LE 138.1 billion were extended in local currency.

- 38 -

2- The Stock Exchange

According to the CMA statistics for July/March period of FY 2002/2003, the value of traded shares and bonds decreased by 26.8%, to a low of LE 18.9 billion, against LE 25.9 billion in the corresponding period of the previous FY. The volume of dealing in bonds took an upward trend, constituting 45.5% of total dealings against 37.3% in the corresponding period. By contrast, dealings in shares decreased to 54.5% of the total from 62.7%. This signified a preference for bond investments during a period influenced by the prevalent tensions in the region.

Companies Operating in the Field of Securities

The structure of the companies engaged in the business of securities remained

unchanged during the period, as illustrated by the following table: The Structure of Companies Operating in the Field of Securities

Till 31/3/2003

No. of Companies (Unit) %

Capital (LE mn)

Total 271 100.0 4688.2 Brokerage firms 145 53.5 212.6 Multi-activity companies 103 38.0 4269.2 Mutual fund management 14 5.2 178.3 Book keepers 2 0.7 2.0 Credit rating agencies 2 0.7 1.0 Valuation and analysis 1 0.4 0.6 Information dissemination services 2 0.7 1.5 Clearing and settlement 1 0.4 3.0 Bond dealings, intermediation & brokerage 1 0.4 20.0

Source: CMA (Information Center).

- 39 -

2/1: Shares Market

2/1/1: Primary (Issue) Market

a) New Issues

The CMA approved new issues for new incorporations and for the capital

increase of existing companies. These issues totaled 974 in number at a value of LE 11.8 billion against 1098 issues and LE 11.5 billion in the corresponding period of the previous FY. Issues for capital increase accounted for 72.4% of the total value of shares against 69.1% in the corresponding period.

New Share Issues on the Stock Exchange

July/March 2001/2002 2002/2003

Total Number of Issues (Unit) 1098 974 New Incorporations 702 613 Capital Increase of Existing Companies 396 361 Total Number of Shares (mn) 416 555 New Incorporations 130 85 Capital Increase of Existing Companies 286 470 Total Value of Shares (LE mn) 11541 11822 New Incorporations 3566 3258 Capital Increase of Existing Companies 7975 8564

Source: CMA (Information Center).

b) Companies Listed on the Stock Exchange

The number of companies listed on the Stock Exchange reached 1151 at the end of March 2003, at a nominal capital of LE 96.3 billion, rising by LE 7.1 billion, whereas their market capital was valued at LE 137.2 billion, with an increase of LE 18.5 billion, compared with the end of June 2002. A major factor behind this increase was the change in the US dollar exchange rate used in the evaluation of these shares.

- 40 -

Companies Listed on the Stock Exchange (LE mn)

June 2002 March 2003 At End of No. of

Companies (Unit)

Nominal Value of Capital

Market Value of Capital

No. of Companies

(Unit)

Nominal Value of Capital

Market Value of Capital

Total 1136 89127 118673 1151 96258 137197 Companies listed on official schedules 147 10724 22705 157 16188 30486 Companies listed on unofficial schedules 989 78403 95968 994 80070 106711

Source: Cairo and Alex. stock exchanges.

Companies listed on the unofficial schedules represented 86.4% of the total, with a nominal capital of LE 80.1 billion, and a market capital of LE 106.7 billion. The companies listed on the official schedules constituted 13.6% of the total number, with a nominal capital of LE 16.2 billion and a market capital of LE 30.5 billion at the end of March 2003.

A follow up of the sectoral distribution of the market capitalization at the end of March 2003 denoted a relative stability of its structure and a continued preference for investment in the sector of finance, insurance and real estate, accounting for 21.2% of total market capital. The utilities sector followed with 16.8%, the building and construction sector with 16.2% and the manufacturing sector with 11.3%.

Market Value of Capital by Sector

(LE mn) At End of June 2002 % March 2003 %

Total 118673 100.0 137197 100.0 Agriculture and Fishing 1056 0.9 1174 0.9 Building and Construction Materials 21417 18.1 22271 16.2 Natural Gas & Mining 6676 5.6 7699 5.6 Manufacturing 11863 10.0 15430 11.3 Trade 3723 3.1 4253 3.1 Finance, Insurance & Real Estates 25626 21.6 29146 21.2 Utilities 22044 18.6 23062 16.8 Others 26268 22.1 34162 24.9

Source: Cairo & Alex. stock exchanges.

- 41 -

2/1/2: Secondary (Trading) Market

During July/March, the total value of dealings in LE and US dollar shares (on the floor and over the counter) decreased to LE 12.2 billion against LE 17.0 billion in the corresponding period of the previous FY (Table 2/3 in the statistical section). The decrease was manifest in LE dealings in all sectors during the period, as their value fell by 45.8% compared with the corresponding period, to record LE 8.7 billion.

Dealing in Shares Listed on the Stock Exchange by Sector

No. of Transactions (Unit)

Volume of Dealt –in Shares (000’s)

Value of Dealt - in Shares (mn)

LE US$ LE US$ LE US$ July/March 2002/2003 Total 537995 9286 502678 24322 5639.1 339.7 - Agriculture, Forests,

and Fishing 1673 - 1957 - 24.9 -

- Mining 3 - - - - - - Construction 34895 - 93215 - 203.9 - - Manufacturing 224776 4340 196748 20610 2249.8 288.5 - Transportation, Com-

munications, Electricity, Gas & Health 28604 1238 16833 481 493.1 4.0

- Retail and Wholesale Trade 1872 - 7963 - 92.5 -

- Finance, Insurance & Real Estates 95445 3360 83197 2988 1441.6 7.8

- Services 150727 348 102765 243 1133.3 39.4 July/March 2001/2002 Total 759086 4068 805076 9659 11112.7 24.4 - Agriculture, Forests,

and Fishing 665 - 1234 - 34.8 - - Mining 16 - 1884 - 1376.9 - - Construction 25670 - 60408 - 142.3 - - Manufacturing 295141 15 220728 3 4282.0 0.4 -Transportation, Communications,

Electricity, Gas & Health 59009 1127 25767 464 912.1 1.6 - Retail and Wholesale

Trade 1816 - 5226 - 98.9 - - Finance, Insurance &

Real Estates 195034 2906 375466 9189 2556.1 22.2 - Services 181735 20 114363 3 1709.6 0.2

Source: CMA.

- 42 -

Conversely, dealings in US$ shares increased to US$ 613 million during the period compared with US$ 199 million in the corresponding period. This occurred as a reflection of the surge in US dollar dealings throughout most of the period, with the exception of the last 3 months that witnessed tensions in the region. The shares of the manufacturing sector contributed 84.9% of the total dealings in US$ dollar on the floor.

The follow up of the price indices on the Stock Exchange indicates that share

prices tended to rise at the end of March 2003. The index introduced by the CMA to cover all corporate shares, recorded a rise of 26 points at the end of June 2002 to reach 653.4 points at the end of March 2003.

Index Number of Share Prices in LE (weekly average)(based on 2/1/1992)

500

550

600

650

700

750

March 02 June 02 Sept. 02 Dec. 02 March 03

- 43 -

Index Number of Share Prices by Sector

0

200

400

600

800

1000

Agriculture

Mining

Construction

Manufacturing

Transportation

TradeFinance&Insurance

Services

June 2002March 2003

Likewise, the new price index, introduced by the Egyptian Stock Exchange (CASE 30) rose to 563.5 points at the end of March 2003 against 472.1 points at the end of June 2002. This index includes the top 30 companies in terms of liquidity and activity. The index is calculated for the last five years on retroactive basis, starting from 1/1/1998, at a value of 1000 points. The index replaced the previous one (CASE 50).

Price Index for Stock Exchange - Cairo & Alex. (CASE 30)

400

500

600

700

March 02 June 02 Sept. 02 Dec. 02 March 03

- 44 -

2/2: Bonds Market

2/2/1 Primary (Issue) Market

The total balance of bond issues (listed and unlisted), rose at a par value to LE

21.6 billion at the end of March 2003, rising by LE 1.3 billion over the end of June 2002. This came as a result of the rise in the outstanding balance of government bonds by LE 0.3 billion, and corporate bonds by LE 1.1 billion. In contrast, the outstanding balance of bank bonds decreased by LE 0.1 billion.

Bonds Issued on the Stock Exchange

(LE mn)

June 2002 March 2003 At End of Listed Unlisted Total % Listed Unlisted Total %

Total 19267.8 1032.0 20299.8 100.0 20477.9 1076.8 21554.7 100.0Government Bonds

14469.8 0.0 14469.8 71.3 14758.7 2.0 14760.7 68.5

- Treasury bonds

13000.0

0.0

13000.0

64.0 13000.0 0.0 13000.0 60.3

- Housing bonds

136.0

0.0

136.0

0.7 131.9 0.4 132.3 0.6

- US dollar development bonds

1333.8

0.0

1333.8

6.6 1626.8 1.6 1628.4 7.6Corporate Bonds

2583.4 179.0 2762.4 13.6 3668.1 182.9 3851.0 17.9

Bank Bonds 2214.6 853.0 3067.6 15.1 2051.1 891.5 2942.6 13.6

Source: Cairo and Alex. stock exchanges.

Such developments were reflected on the relative structure of the issued bonds. Government bonds constituted 68.5% of the total at the end of March 2003 against 71.3% at the end of June 2002, corporate bonds 17.9% against 13.6% and bank bonds 13.6% against 15.1%.

- 45 -

2/2/2 Secondary (Trading) Market

The total value of bond transactions amounted to about LE 8.6 billion during

the period against LE 9.7 billion in the corresponding period. This was ascribed to the drop in LE and US$ bond transactions. The value of transactions in LE bonds reached LE 8.5 billion against LE 9.1 billion. Trading in bonds was mainly in Egyptian treasury bonds at a total value of LE 8.1 billion.

Dealing in Listed Bonds (on the Floor) July /March 2001/2002 2002/2003 No. of

Trans-actions

Quantity (000’s)

Value (mn)

No. of Trans-actions

Quantity (000’s)

Value (mn)

Total Bonds (LE Pound) 1121 8661 9109.6 952 9020 8473.0

Treasury bonds 807 8390 8912.5 586 7427 8096.4

Housing bonds 179 9 0.6 236 22 0.6

Corporate bonds 28 98 35.4 14 363 93.9

Bank bonds 107 164 161.1 116 1208 281.1

Total Bonds (US Dollar) 28 935 119.8 42 35 28.6

Development bonds 17 901 88.9 0.0 0.0 0.0

Corporate bonds 11 34 30.9 42 35 28.6Source: Cairo and Alex. stock exchanges.

On the other hand, the value of US dollar bond transactions decreased to reach US$ 28.6 million, which were conducted entirely in corporate bonds on the floor – against US$ 119.8 million in the corresponding period of the preceding FY.

- 46 -

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

Foreign investors’ dealings on the Egyptian Exchange declined to LE 4.9 billion against LE 7.7 billion. This was due to the uncertainties associated with the aftereffects of the tension in the Middle East during the period.

Transactions of Foreign Investors on the Stock Exchange

July/March 2001/2002 2002/2003

LE US$ LE US$

No. of Transactions(unit) 155214 634 98306 5603 Purchases 74247 369 52648 4993 Sales 80967 265 45658 610 Total Number of Dealt-In Documents (mn) 200 8 131 35 Purchases 93 4 67 21 Sales 107 4 64 14 Total Value of Dealt-In Documents (mn) 7435.0 57.6 2315.8 550.8 Purchases 3802.2 40.0 1276.9 337.2 Sales 3632.8 17.6 1038.9 213.6

Source: CMA (Information Center). Foreign investors' purchases and sales in LE noticeably retreated, reaching LE 1.3 billion and LE 1.0 billion, respectively, during the period against LE 3.8 billion and LE 3.6 billion. As for the dealings of foreign investors in US$, the value of their purchases escalated to US$ 337.2 million against US$ 40 million during the period. Likewise, the value of their sales surged to US$ 213.6 million against US$ 17.6 million.

- 47 -

2/4: Mutual Funds

The number of local mutual funds remained unchanged at 22, comprising only three close funds listed on the Egyptian Stock Exchange, during the period from the end of June 2002 till the end of March 2003. The nominal capital of local funds’ documents totaled about LE 3.4 billion at the end of March 2003 against LE 3.1 billion at the end of June 2002. This is owed to the success of the financial institutions to which these funds are affiliated, in benefiting from the market conditions by entering as buyers of documents at suitable prices.

The value of transactions on the documents of the listed funds reached some LE 20.1 million, as an outcome of 48 transactions covering 33.6 thousand documents during the period under review, compared with LE 23.5 million through 119 transactions covering 67.8 thousand documents in the corresponding period.

As for the ten Egyptian mutual funds established abroad, the closing prices of six of them trended downwards at the end of March 2003 compared with the end of June 2002. This reflects the negative effect of the prevailing tensions on foreign investment during the period.

2/5: Global Depositary Receipts (GDRs)

GDRs traded on London Stock Exchange play a key role in directing foreign investment to Egyptian securities. The price trends of GDRs were affected by a number of factors, the most important of which were the performance of their issuing companies and the national, regional and international conditions. During the last three months of the period July/March 2002/2003, an increase was noticed in the closing prices of most of GDRs at the end of January 2003, followed by a downtrend during February and March 2003.

- 48 -

Global Depositary Receipts (GDRs)

Prices of GDR's on London

Exchange

Stock Prices of Issuing Companies on the Egyptian

Exchange

In US Dollar at End of In LE at End of Position and Date

of Issue June 2002

March 2003

Change %

June 2002

March 2003

Change %

First-July 1996 5.15 4.83 (6.20) 27.98 30.40 8.6 Second-July 1996 6.80 6.05 (11.0) 35.43 37.13 4.8 Third - Feb. 1997 8.00 13.60 70.0 42.98 65.00 51.2 Fourth-Oct.1997 0.83 1.10 32.5 13.86 22.46 62.0 Fifth- April 1998 1.63 1.23 (24.5) 17.91 16.19 (9.6) Sixth-August1998 1.58 1.08 (31.6) 3.49 3.48 (0.3) Seventh- June 1999 0.68 0.78 14.7 1.21 1.52 25.6 Eighth-July 1999 0.18 0.20 11.1 - - - Ninth- July 2000 0.85 1.29 51.8 9.25 16.60 79.5 Tenth-August 2002 - 10.08 - 30.03 33.49 11.5

Source: Cairo & Alexandria stock exchanges. It is noticed that the closing prices of most GDRs issued till the end of March 2003 took the same trend shown by their local stock prices. Thus, the prices of five GDRs rose, and of two decreased. On the other hand, the rest of GDRs followed a different trend.

- 49 -

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

During the period July/March of the FY 2002/2003, the fiscal policy

continued to give priority in expenditure to the social dimension, and provide the citizens with the basic services. In revenues, the policy focused on increasing revenues by intensifying control and supervision efforts on the one hand, and by speeding up the collection of all public taxes, on the other. This is to be done through streamlining the accounting procedures for taxpayers, and by setting rules and bases, to be agreed upon with the taxpayers of the different trades (commercial and industrial); along with raising the efficiency of the executive staff in the field of customs release, in coordination with other supervisory entities.

Among the most important measures taken during the last quarter of the

period were facilitating customs release of imported goods from all ports of customs according to the drawback system, and setting up a new system for calculating the customs dollar. This is in addition to entitling departures to reclaim the sales tax levied on their purchases of over LE 1000 in Egyptian merchandise, within three months of the date of purchase. In addition, customs tariffs were reduced, including reductions on 129 items of production requirements for a large number of products. The purpose of such measure was to lower the cost of Egyptian products, promote exports, and achieve price stability.

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

of the General Government for FY 2002/2003

The revised estimates of the consolidated fiscal operations for FY 2002/2003 remained unchanged. Total revenues including grants were estimated at about LE 114.9 billion or 28.4% of GDP. Total expenditures including net lending were estimated at some LE 128.8 billion or 31.8% of GDP, and the overall deficit at around LE 13.9 billion or 3.4% of GDP.

- 50 - 3/1/2: Follow up of the Consolidated Fiscal Operations of the

General Government for July/March of the FY 2002/2003 A) Budget Sector

According to the follow-up of the implementation of the fiscal operations of the state budget sector (the administrative system, local administration and service authorities) for July/March of the FY 2002/2003, collected revenues including grants totaled LE 53.3 billion or 62.1% of the total estimates for the whole FY, rising 4.0% over the previous corresponding period. Collected revenues (current and capital) reached some LE 51.5 billion or 62.6% of the total estimates, rising 4.2% over the corresponding period. These revenues consisted mostly of current revenues of LE 50.8 billion, with an implementation ratio of 62.5% of the estimated total, with a rise of 4.1% over the corresponding period. Tax revenues represented 70.7% of the total collected revenues, reaching LE 36.4 billion. The majority of these revenues were from income taxes and taxes on goods and services (LE 14.4 billion each). Collected customs revenues posted about LE 7.5 billion, whereas other tax revenues reached some LE 100 million.

On the other hand, collected non-tax revenues rose by 3.4% over the previous corresponding period, accounting for about LE 14.4 billion or 27.9% of the total collected revenues during the period, with an implementation ratio of 59.4% of the total estimate for the whole year. The bulk of these revenues (61.7%) came from the profit surpluses transferred by the CBE and the Suez Canal Authority, and some other economic authorities, as well as by the Egyptian General Petroleum Corporation [EGPC]. Duties and some other non-tax revenues contributed the remaining 38.3%.

It is worth mentioning that the surplus transfers by the Suez Canal

Authority increased during the period by 33.1% compared with the previous corresponding period. In contrast, transfers by the CBE and the EGPC dropped by 10.2% and 59.8%, respectively.

- 51 -

Collected capital revenues, mainly investments’ own finance and some capital transfers, amounted to LE 0.7 billion or 1.4% of the total collected revenues. This denoted an implementation ratio of 67.0% of the total estimated revenues for the whole year, increasing 9.6% over the corresponding period.

Grants, mostly external (current and capital), decreased 0.8% below the period of comparison, standing at LE 1.8 billion or 51.5% of the total projected for the year.

Expenditures including net lending scaled up by 12.8% over the

corresponding period of the previous FY, posting some LE 78.9 billion or 70.7% of the total estimates for the whole FY.

Current expenditures (wages and salaries, defense outlays, interest payments

and some other current expenditure including subsidies, pensions, goods and service supplies and other current expenditures) amounted to about LE 67.4 billion or 86.3% of the total expenditures during the period, with an implementation ratio of 71.6% of the total estimates for the year. Actual ratios of the main items of current expenditures during the period, ranged between 66.7% and 77.2%, which are usual ratios for this period.

Capital expenditures, mostly on the implemented investments for the budget

sector, climbed by 4.0% over the previous corresponding period, representing LE 10.7 billion or 63.7% of the total estimated for the year and 13.7% of the total expenditures during the period.

As for lending and repayment operations, net lending recorded LE 833

million, rising by far over the corresponding period, with an implementation ratio of 138.6% of the total estimated for the year.

The aforementioned fiscal operations unfolded an overall deficit of LE 25.6

billion or 99.3% of the estimated total, representing 6.3% of GDP. The deficit was financed by the domestic banking and non-banking sources available during the period.

- 52 - B) Budget Sector, NIB and GASC

When adding the fiscal operations of the NIB and GASC to the budget sector, revenues including grants rose by some LE 10.5 billion to reach LE 63.8 billion due to the increase in non-tax revenues at the same value. Moreover, total expenditures including net lending increased by some LE 17.1 billion to reach LE 96.0 billion, as an outcome of the rise in domestic interest payments by LE 11.7 billion and net lending by LE 5.6 billion, and the fall in some other current expenditures by LE 0.2 billion. Consequently, the overall deficit during the period widened by 39.2% compared with the previous corresponding period, recording LE 32.2 billion, with an implementation ratio of 97.1% of the total projected for the year. C) Budget Sector, NIB & GASC and SIFs

When adding the fiscal operations of SIFs to the above-mentioned operations,

non-tax revenues increased by some LE 9.7 billion, wages and salaries by about LE 0.2 billion and miscellaneous current expenditures by nearly LE 9.6 billion. In contrast, domestic interest payments decreased by LE 12.9 billion and net lending by some LE 0.1 billion.

- 53 -

Actual Consolidated Fiscal Operations of the General Government (The Budget Sector, NIB & GASC and SIFs)

(Total Revenues Including Grants) (LE bn)

July/March 2002/2003 Implement-

ation Ratio

of the Total

Estimated for the Year

%

Relative Structure

Budget Sector, NIB & GASC

and SIFs

Implement-ation Ratio

of the Total

Estimated for the Year

%

Relative Structure

Budget Sector, NIB & GASC

Implement- ation Ratio

of the Total

Estimated for the Year

%

Relative Structure

Budget Sector

64.0 100.0 73.5 63.8 100.0 63.8 62.1 100.0 53.3 Total Revenues, including Grants

64.4 97.6 71.7 64.2 97.2 62.0 62.6 96.6 51.5 Total Revenues

64.3 96.6 71.0 64.2 96.1 61.3 62.5 95.3 50.8 Current Revenues

63.8 49.5 36.4 63.8 57.1 36.4 63.8 68.3 36.4 Tax Revenues

65.0 19.6 14.4 65.0 22.5 14.4 65.0 27.0 14.4 Income tax

61.7 19.6 14.4 61.7 22.6 14.4 61.7 27.1 14.4

Commodity and services taxes

65.9 10.2 7.5 65.9 11.8 7.5 65.9 14.0 7.5 Customs 53.5 0.1 0.1 53.5 0.2 0.1 53.5 0.2 0.1 Other

64.9 47.1 34.6 64.7 39.0 24.9 59.4 27.0 14.4 Non-tax Revenues

67.0 1.0 0.7 67.0 1.1 0.7 67.0 1.3 0.7 Capital Revenues 51.5 2.4 1.8 51.5 2.8 1.8 51.5 3.4 1.8 Grants

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

Thus, total revenues including grants under the consolidated fiscal operations

of the general government dropped by 5.9% compared with the corresponding period, to post LE 73.5 billion or 18.1% of GDP, with an implementation ratio of 64.0% of the total estimate. Total expenditures including net lending amounted to LE 92.8 billion, with an implementation ratio of 72.0% of the total estimate, rising 7.5% over the period of comparison, and representing 22.9% of GDP.

- 54 -

Actual Consolidated Fiscal Operations of the General Government (The Budget Sector, NIB & GASC and SIFs) (Total Expenditures Including Net Lending)

(LE bn)

July/March 2002/2003 Implement-

ation Ratio of the Total

Estimated for the Year

%

Relative Structure

Budget Sector, NIB & GASC

and SIFs

Implement-ation Ratio of the Total

Estimated for the Year

%

Relative Structure

Budget Sector, NIB & GASC

Implement-ation Ratio of the Total

Estimated for the Year

%

Relative Structure

Budget Sector

72.0 100.0 92.8 72.1 100.0 96.0 70.7 100.0 78.9

Total Expenditures, including Net Lending

71.7 93.2 86.5 71.5 93.3 89.6 70.4 99.0 78.1 Total Expenditures

73.0 81.7 75.8 72.7 82.1 78.9 71.6 85.4 67.4 Current Expenditures

70.7 24.3 22.5 70.7 23.2 22.3 70.7 28.3 22.3 Wages and Salaries

73.9 57.4 53.3 73.5 58.9 56.6 72.0 57.1 45.1 Other Current Expenditures

77.2 9.3 8.6 77.2 8.9 8.6 77.2 10.9 8.6 Defense 70.9 19.3 17.9 73.4 32.0 30.8 70.4 24.2 19.1 Interest 69.1 16.5 15.3 72.6 29.3 28.2 68.8 20.9 16.5 Domestic 83.1 2.8 2.6 83.1 2.7 2.6 83.1 3.3 2.6 External 75.1 28.8 26.8 72.1 18.0 17.2 71.4 22.0 17.4 Others

63.7 11.5 10.7 63.7 11.2 10.7 63.7 13.16 10.7 Capital Expenditures

77.6

6.8

6.3

81.0

6.7

6.4

138.6

1.0

0.8

Lending minus Repayment

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

The aforementioned developments on both sides of revenues and expenditures brought about an overall deficit of LE 19.3 billion during the period, exceeding its estimates for the whole fiscal year by 38.5%, and rising 134.8 % over the corresponding period.

- 55 -

Actual Consolidated Fiscal Operations of the General Government (The Budget Sector, NIB & GASC and SIFs)

(Overall Deficit [Surplus] and Total Financing) (LE bn)

July/March 2002/2003 Implement-

ation Ratio of the Total

Estimated for the Year

%

Relative Structure

Budget Sector, NIB & GASC

and SIFs

Implement-ation Ratio of the Total

Estimated for the Year

%

Relative Structure

Budget Sector, NIB & GASC

Implement-ation Ratio of the Total

Estimated for the Year

%

Relative Structure

Budget Sector

73.5 63.8 53.3 Total Revenues, including Grants

92.8 96.0 78.9

Total Expenditures, including Net Lending

-19.3 -32.2 -25.6 Overall Deficit (Surplus)

138.5 100.0 19.3 97.1 100.0 32.2 99.3 100.0 25.6 Total Financing 95.2 -16.3 -3.1 95.2 -9.7 -3.1 95.2 -12.2 -3.1 External Financing

178.5 172.7 33.3 100.0 120.9 39.0 101.9 125.6 32.2 Domestic Financing 98.8 114.8 22.2 103.7 78.6 25.4 107.2 105.2 27.0 Banking 93.2 172.6 33.3 93.2 103.0 33.3 93.2 129.6 33.3 Obligations 98.4 111.4 21.4 92.3 56.4 18.2 87.2 64.6 16.6 Deposits

121.4 53.6 10.3 121.4 32.0 10.3 121.4 40.2 10.3 Revaluation

Differences 297.0 57.9 11.1 93.8 42.3 13.6 81.1 20.4 5.2 Non-banking

613.2 72.4 13.9 79.9 51.0 16.4 64.4 31.3 8.0 From NIB to

government 46.4 -14.5 -2.8 46.4 -8.7 -2.8 46.4 -10.9 -2.8 Others:

- -0.5 -0.1 - -0.3 -0.1 - -0.4 -0.1 Securities

28.1 -4.4 -0.8 28.1 -2.6 -0.8 28.1 -3.3 -0.8 Suppliers’

credit 61.9 -9.6 -1.9 61.9 -5.8 -1.9 61.9 -7.2 -1.9 Arrears 7.2 0.2 .. 7.2 0.1 .. 7.2 0.1 .. Privatization

1.1 - .. 3.0 - .. 3.0 -0.1 .. Others (Repayments)

435.9 -56.6 -10.9 145.7 -11.3 -3.7 138.1 -13.4 -3.5 Unclassified Source: Ministry of Finance. Ratios are calculated in terms of LE million. .. Less than LE 0.1 billion.

- 56 - Domestic financing sources in the amount of LE 33.3 billion were available during the period, of which the banking sources accounted for LE 22.2 billion and the non-banking sources for LE 11.1 billion. As such, the resources fully covered the overall deficit, and repaid domestic and external debts in the amount of LE 10.9 billion and LE 3.1 billion worth (net), respectively.

- 57 -

3/2: Domestic Public Debt

3/2/1: Domestic Government Debt Domestic government debt amounted to LE 246.4 billion at the end of

March 2003, increasing by LE 25.2 billion compared with the end of June 2002. The increase stemmed from a rise in Treasury bills and bonds by LE 18.7 billion, and in government debt to the NIB by LE 6.0 billion. Added to this was the retreat in net government credit position at the banking system by LE 0.5 billion, as an outcome of the rise in government loans at a higher rate than in its deposits.

Because of changes in the exchange rate, the balance of Treasury bills and

bonds increased. TBs outstanding balance rose by LE 14.0 billion. Foreign currency bonds, held with public sector banks, rose by LE 2.5 billion and dollar-denominated sovereign bonds, held with resident financial institutions in Egypt, rose by LE 2.2 billion.

The period under review has witnessed an accelerated amortization (full and

partial) of LE 4.0 billion of the previous issues of government bonds to meet the cash deficit with the central bank on the 1989/1990 budget. In place of these bonds, new issues were floated at the same value in order to increase the capital of public sector banks.

- 58 -

Domestic Government Debt (LE bn)

June 2002 March 2003 Balances at End of Value % Value % Change

+ (-) Domestic Government Debt 221.2 100.0 246.4 100.0 25.2 - Balances of Bonds & Bills 165.9 75.0 184.6 74.9 18.7 Bills and bonds* 125.9 56.9 130.6 53.0 4.7 Of which: traded on the

Stock Exchange

15.6

7.1

17.8

7.2

2.2 Treasury bills 40.0 18.1 54.0 21.9 14.0

- Government Borrowing from the NIB

113.8 51.4 119.8

48.6

6.0

- Net Government Balances at the Banking System

Facilities Deposits

-58.5 19.0

-77.5

-26.48.6

-35.0

-58.036.0

-94.0

-23.5 14.6

-38.1

0.5

17.0 -16.5

Source: Ministry of Finance, CBE and NIB. - Ratios are calculated in terms of LE million. *Including treasury bonds; housing bonds; foreign currency bonds with public sector commercial banks; and the 5% ratio retained from profits of corporations subject to Law no. 97 for 1983 for the purchase of government bonds, and sovereign bonds denominated in US dollar traded on world stock exchanges and held with financial institutions resident in Egypt (banking system and insurance sector).

Domestic Government Debt

-100

-50

0

50

100

150

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

LE bn

June 2002 March 2003

- 59 -

3/2/2: Debts of Public Economic Authorities

Debts of the public economic authorities dropped by LE 1.8 billion during the

period to reach LE 39.3 billion at the end of March 2003 because of the improvement of LE 4.1 billion in their net credit position at the banking system. The improvement was due to the increase in the deposits of public economic authorities at the banking system by some LE 3.7 billion, coupled with a fall in the credit facilities extended to them by about LE 0.4 billion during the period, on the one hand, and to the increase of LE 2.3 billion in their borrowing balance from the NIB, on the other.

Debts of Public Economic Authorities (LE bn)

June 2002 March 2003 Balances at End of Value % Value % Change

+ (-) Total Debt 41.1 100.0 39.3 100.0 -1.8 -Net Balances of the Economic Authorities at the Banking System

-6.0

-14.5

-10.1

-25.7

-4.1

• Facilities 14.3 34.9 13.9 35.4 -0.4 • Deposits -20.3 -49.4 -24.0 -61.1 -3.7

- Borrowings of the Economic Authorities from the NIB

47.1

114.5

49.4

125.7

2.3

Source: Ibid. 3/2/3: Resources and Uses of the NIB

NIB resources from the various saving vessels totaled some LE 234.6 billion

at the end of March 2003, rising by LE 6.3 billion over the end of June 2002. The rise was attributed to the following factors. There was an increase in the proceeds of investment certificates (Groups A, B and C) by some LE 4.8 billion, and higher surpluses transferred to the NIB by the two Social Insurance Funds for Civil Servants and the Business Sector Employees (public and private) by some LE 2.5 billion. Post office saving accounts increased by about LE 2.2 billion, and the receipts of US dollar development bonds increased by some LE 0.4 billion. Meanwhile, the cumulative returns on Group A investment certificates retreated by about LE 1.0 billion.

- 60 -

The NIB used some LE 119.8 billion or 51.1% of its total resources to finance government investments, and LE 49.4 billion or 21.0% of the total to finance investments of the public economic authorities. The remaining LE 65.4 billion (or 27.9% of the total) went to the financing of its various development projects. This financing was namely in loans to holding companies and their affiliates. There was also concessional lending in the fields of low-cost housing, land reclamation and other new fields in the agriculture sector, exportation projects, and in the industrial areas, according to the specified program of the economic and social development plan for the FY 2002/2003. Added to this are the NIB's equity participations.

Resources and Uses of the NIB (LE bn)

June 2002 March 2003 Balances at End of Value % Value % Change

+ (-) Resources 228.3 100.0 234.6 100.0 6.3

Social Insurance Fund for Civil Servants

83.8

36.7

86.2

36.7

2.4

Social Insurance Fund for Business Sector Employees (Public and Private)

70.9

31.0

71.0

30.3

0.1 Investment certificate proceeds 49.0 21.5 53.8 22.9 4.8 Cumulative returns on

investment certificates (Group A)

7.4

3.2

6.4

2.8

-1.0 US dollar development bonds

proceeds

1.3

0.6

1.7

0.7

0.4 Post office saving accounts 17.1 7.5 19.3 8.2 2.2 NIB’s account balances at the

banking system (net)

-2.8

-1.2

-5.4

-2.3

-2.6 Others 1.6 0.7 1.6 0.7 -

Uses 228.3 100.0 234.6 100.0 6.3 Government 113.8 49.8 119.8 51.1 6.0 Economic authorities 47.1 20.7 49.4 21.0 2.3 Others 67.4 29.5 65.4 27.9 -2.0

Source: Ibid.

As a result of the above mentioned transactions, the NIB net credit position at the banking system retreated by LE 2.6 billion, to reach LE 5.4 billion at the end of March 2003.

- 61 -

4- External Transactions 4/1: Foreign Exchange Market

During the period July/March of the FY 2002/2003, the Executive Regula-

tions of the Foreign Exchange Law No. 38 for 1994 was amended by the Prime Minister’s Decree No. 183 for 2003, effective as of January 29, 2003. Accordingly, the banks authorized to deal in foreign exchange are allowed to set their rates for buying and selling freely within the framework of the free foreign exchange market. At the same time, the Central Bank is to announce its rates for dealing in foreign exchange on a daily basis according to the weighted average of the banks' closing price, as announced by the Forex Statistics Chamber. Moreover, each exchange dealer company is to announce - in agreement with an authorized bank - the bank’s exchange rates for buying and selling foreign currencies and traveler’s cheques, that are to be applied to the company’s transactions with its customers.

By virtue of the Prime Minister's Decree No. 506 for 2003 dated 24/3/2003,

all the entities designated by the Decree are to sell 75% of their foreign currency earnings to banks within a week of their receipt. 25% of this amount is to be set aside in special accounts to meet the obligations of these entities to banks, and to satisfy the needs of their foreign exchange activities. The following are the entities designated by the Decree: the ministries and their affiliate organs, public economic and service authorities, public sector and public business sector companies, and companies, individuals and establishments of the private sector.

During the period, the market deficit narrowed to US$ 0.4 billion against US$

2.7 billion during the corresponding period of the previous FY. This was a main reflection of the US$ 422 million deficit in the transactions of the banking system. By contrast, transactions of exchange dealer companies unfolded a slight surplus of US$ 5 million during the period under review. The shrinkage in the deficit was due to a retreat in utilizations by US$ 6.4 billion and in resources by US$ 4.1 billion.

- 62 -

Concurrently, banks' net assets in foreign currencies rose by US$ 0.3 billion, to reach US$ 3.0 billion at the end of March 2003. This led to an increase in the ratio between banks’ assets and liabilities in foreign currencies to reach 111.2% at the end of March 2003, from 110.7% at the end of June 2002.

Resources and Utilizations of the

Foreign Exchange Market (US$ mn)

July/March 2001/2002 2002/2003

Surplus/Deficit (-) -2705 -417 The banking system -3003 -422 Exchange dealer companies 297 5 Resources 9289 5160 The banking system 6544 4775 Exchange dealer companies 2745 385 Utilizations 11995 5577 The banking system 9547 5197 Exchange dealer companies 2448 380

Net international reserves with the Central Bank remained unchanged at about

US$ 14.1 billion at the end of March 2003.

Egyptian Pound Movements vis-à-vis the US Dollar (Transfers/Purchases)*

on the Foreign Exchange Market (Pt/dollar)

End of Month Monthly Average March 2001 384.0 384.0 April 384.0 384.0 May 385.0 384.1 June 385.0 385.0 July 389.0 388.7 August till November 414.0 414.0 December 449.0 435.5 January 2002 450.0 449.6 February till December 450.0 450.0 January 2003 537.8 455.9 February 551.4 546.3 March 572.8 565.1

* Exchange rate for CBE transactions.

- 63 -

During the period under review, exchange dealer companies have shown a retreat in their number as well as in their activity. The number of exchange dealer companies actually in practice during the period under review retreated to 73, with 57 branches at the end of March 2003. This brought the number of their offices (head offices and branches) to 130 at the end of March 2003 against 173 at the end of June 2002, denoting a fall of 43 offices.

Dealings of exchange dealer companies on the forex market shrank during the

period. Their resources recorded some US$ 385 million or 7.6% of total market resources, declining by US$ 2.4 billion compared with the corresponding period of the preceding FY. Their uses posted US$ 380 million or 6.8% of total market uses, falling by some US$ 2.1 billion compared with the corresponding period.

- 64 -

4/2 Balance of Payments

4/2/1: Summary

The BOP current transactions revealed a surplus of US$ 714.1 million, during the period July/March of the FY 2002/2003, against US$ 299.1 million during the corresponding period of the previous FY. This resulted mainly from the improvement in the performance of both the trade and service balances. The trade deficit narrowed by US$ 298.5 million or 5.3%, to reach US$ 5.3 billion, as a reflection of the rise in oil and non-oil exports. Likewise, the surplus on the services balance rose by US$ 636.7 million or 22.5% to reach US$ 3.5 billion, whereas net unrequited transfers retreated by 16.8% to reach only US$ 2.6 billion.

External capital and financial transactions revealed a net outflow of US$ 1733.1 million during the period, against US$ 94.2 million during the corresponding period of the preceding FY. This was chiefly ascribed to the increase in the outflows of other assets and liabilities (net) (represented in the changes in banks’ foreign assets and liabilities; the CBE non-reserve foreign assets; and the counterpart of some items in the current account), to reach US$ 2.0 billion during the period, against US$ 1.5 billion. Concurrently, there was an outflow of US$ 272.5 million, represented in the purchases of sovereign bonds denominated in US dollar by banks and insurance companies in Egypt. In contrast, the corresponding period wherein these bonds were issued, witnessed an inflow of US$ 1.1 billion. Portfolio investment in Egypt recorded a net outflow of US$ 206.0 million, against a net inflow of US$ 67.3 million. On the other hand, foreign direct investment in Egypt achieved a net inflow of US$ 578.1 million, against US$ 388.1 million.

Against this backdrop, Egypt’s external transactions during the period revealed shrinkage in the BOP overall deficit to only US$ 52.2 million, against US$ 674.4 million, and in turn, foreign currency reserve assets with the CBE declined by the same amount.

- 65 -

Summary of Current

Receipts and Payments (US$ mn)

July/March 2001/2002 % 2002/2003 % Change (-)Current Receipts 15568.3 100.0 16237.4 100.0 669.1 Export proceeds* 5294.2 34.0 5905.4 36.4 611.2 Service receipts 7169.0 46.1 7747.1 47.7 578.1 Private transfers (net) 2338.9 15.0 2175.1 13.4 (163.8) Official transfers (net) 766.2 4.9 409.8 2.5 (356.4) Current Payments 15269.2 100.0 15523.3 100.0 254.1 Import payments** 10928.5 71.6 11241.2 72.4 312.7 Service payments 4340.7 28.4 4282.1 27.6 (58.6) * Calculated on the basis of FOB, 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 the exports of free zones to the rest of the world.

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

Balance of PaymentsJuly /March

(8.0)

(6.0)

(4.0)

(2.0)

0.0

2.0

4.0

6.0

TradeBalance

ServicesBalance

Transfers(net)

Capital &Financial A/C

OverallBalance

2000/2001

2001/2002

2002/2003

US$ bn

- 66 -

The current account indicates a rise in current receipts by US$ 669.1 million or 4.3%, to a total of US$ 16.2 billion. This is attributed to the increase in the export proceeds of goods by 11.5% and in service receipts by 8.1%. On the other hand, current payments increased by US$ 254.1 million or 1.7% to reach US$ 15.5 billion, owing to the rise in import payments by 2.9% and the drop in service payments by 1.4%.

Indicators of the external balance improved, as current receipts, excluding

official transfers, covered 102.0% of current payments, against 96.9%. When official transfers are included, the ratio will rise to 104.6%, against 102.0%.

Current Receipts/Payments Coverage Ratio (%)

July/March 2001/2002 2002/2003Commodity Exports/Commodity Imports 48.4 52.5 Invisible Receipts/Invisible Payments 165.2 180.9 Current Receipts/Current Payments (excluding official transfers) 96.9 102.0

Current Receipts/Current Payments 102.0 104.6

- 67 -

Balance of Payments (US$ mn)

July/March 2001/2002 2002/2003*

Current Account 299.1 714.1 Current Account (Excluding Transfers) -2806.0 -1870.8

Trade Balance -5634.3 -5335.8 Exports** 5294.2 5905.4

Oil and products 1751.6 2279.6 Non-oil exports 3542.6 3625.8

Imports** -10928.5 -11241.2 Oil imports -1824.4 -1638.0 Other imports -9104.1 -9603.2

Services Balance 2828.3 3465.0 Receipts, of which: 7169.0 7747.1

Transportation, of which: 2023.6 2182.8 Suez Canal dues (1363.5) (1597.2)

Travel 2543.6 2887.9 Investment income 737.9 478.5

Payments, of which: -4340.7 -4282.1 Transportation -320.4 -273.0 Investment income -666.1 -680.2

Transfers 3105.1 2584.9 Official (net) 766.2 409.8 Private (net) 2338.9 2175.1

Capital and Financial Transactions -94.2 -1733.1 Direct investment in Egypt (net) 388.1 578.1 Direct investment abroad -7.7 -26.9 Portfolio investment in Egypt (net) 67.3 -206.0 Portfolio investment abroad -0.6 -13.7 Other investments (net) -541.3 -2064.6

Errors and Omissions (Net)*** -879.3 966.8 Overall Balance -674.4 -52.2 Change in Reserve Assets, Increase (-)+++ 674.4 52.2 * Preliminary figures. ** Including imports and exports of the free zones. *** A balancing item for the rise or drop in the estimates of the items recorded in the BOP. It

represents the difference between the overall balance (overall surplus or deficit calculated on the basis that it equals the change in the CBE’s total reserve foreign assets) and total current and capital and financial balances.

+++Increase in assets equals (-) as it represents an outflow, and the drop in assets equals (+) as it represents an inflow.

- 68 -

4/2/2: Trade Balance

Commodity export proceeds rose by US$ 611.2 million or 11.5%, to reach US$ 5.9 billion during July/March 2002/2003. This is owed to an increase of 30.1% in oil export proceeds to reach US$ 2.3 billion and an increase of 2.3% in non-oil export proceeds to reach US$ 3.6 billion.

Likewise, import payments stepped up by US$ 312.7 million or 2.9%, to reach US$ 11.2 billion, due to an increase in import payments of all groups, except for raw materials and consumer goods.

Against this background, the trade deficit narrowed by 5.3% to reach US$ 5.3 billion against US$ 5.6 billion, and the coverage ratio of export proceeds/import payments improved from 48.4% to 52.5%.

5.3

10.9

5.9

11.2

0

2

4

6

8

10

12

2001/2002 2002/2003

Commodity TransactionsJuly / March

Exports Imports

US$ bn

- 69 -

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

A) Exports by Degree of Processing

Due to a rise in oil and non-oil export earnings, commodity export proceeds

increased by US$ 611.2 million to reach US$ 5.9 billion during the period July/March 2002/2003. The proceeds of crude oil and its products increased by US$ 528.0 million to reach US$ 2.3 billion, mainly as an outcome of the rise in the export proceeds of both crude oil by 48.3% to reach US$ 770.3 million, and in oil products by 26.2% to reach US$ 1.1 billion. Export proceeds of bunker and jet fuel increased by 12.5%, to post US$ 373.6 million, as an outcome of a 34.1% increase in the exported quantities of crude oil. Another contributing factor was the price rises of crude oil from US$ 21.3 to US$ 23.5 per barrel, and of oil products from US$ 164.1 to US$ 233.5 per ton. On the other hand, the exported quantities of oil products decreased by 11.4%.

Non-oil export proceeds of semi-finished goods rose 55.8% to reach US$ 486.4 million. This was attributed to the increase in exports of cast iron and its products; carbon; organic and inorganic chemicals; unmixed aluminium; cotton yarn and essential oils and resinous substances. Likewise, raw material exports mounted by 65.7% to reach US$ 192.2 million, and raw cotton exports by US$ 72.8 million to reach US$ 131.7 million. On the other hand, export proceeds of finished goods declined by US$ 66.3 million or 3.0%, reaching US$ 2.2 billion, as an outcome of the fall in the export proceeds of iron and steel articles; carpets and floor coverings; rice and dairy products.

- 70 -

Commodity Distribution of Exports by Degree of Processing

(US$ mn)

July/March

2001/2002 2002/2003

Value % Value % Change

(-) Total 5294.2 100.0 5905.4 100.0 611.2 1- Fuel, mineral oils and products 1776.5 33.5 2299.6 38.9 523.1 2- Cotton 58.9 1.1 131.7 2.2 72.8 3- Raw materials 116.0 2.2 192.2 3.3 76.2 4- Semi-finished goods 312.1 5.9 486.4 8.2 174.3 5- Finished goods 2237.8 42.3 2171.5 36.8 (66.3) 6- Miscellaneous items, unclassified 792.9 15.0 624.0 10.6 (168.9)

B) Imports by Degree of Use

Commodity import payments rose by US$ 312.7 million or 2.9%, to reach

US$ 11.2 billion. This was ascribed to the increase in imports of all groups, apart from raw materials and consumer goods. Imports of intermediate goods rose by US$ 376.6 million or 13.1% to US$ 3.3 billion. This was a reflection of the increase in imports of iron and steel products; synthetic fibres; aluminium and its articles; cement; animal and vegetable fats, greases and oils; organic and inorganic chemicals; rubber and its articles; plastics and articles thereof; and tanning and dyeing extracts. On the other hand, a decline was manifest in the imports of raw sugar; paper and cardboard and products thereof; and wood and its articles.

Imports of fuel and mineral oils increased by US$ 231.9 million or 49.1% to reach US$ 704.4 million. The rise was mainly in oil products by US$ 232.9 million, reaching US$ 651.0 million.

- 71 -

Imports of investment goods increased as well by US$ 47.7 million or 2.0%, to reach US$ 2.5 billion. This came as a result of the rise in imports of car parts, accessories and spare parts; of locomotives, trains and railway equipment; of lifts and bulldozers and parts thereof; engines, generators, transformers and their spare parts; of air conditioners; and of computers. Meanwhile, imports of raw materials declined by US$ 407.3 million or 17.3% to reach US$ 2.0 billion. The decline was mainly pronounced in crude oil; tobacco; oil seeds and oleaginous fruits; maize; and raw cotton, while imports of wheat rose.

Imports of consumer goods decreased by US$ 56.2 million or 2.7%, to reach US$ 2.0 billion. The breakdown of these goods indicated that non-durable goods decreased by US$ 121.1 million, posting US$ 1.4 billion. This resulted from lower imports of ready-made clothes; pharmaceuticals; remains of foodstuff industries and food preparations for animals; wheat flour; lentil; livestock; cotton textiles; insecticides; and dairy products. In contrast, imports of refined sugar and products thereof and fish stepped up. On the other hand, imports of durable goods rose by US$ 64.9 million to reach US$ 591.2 million, mainly passenger cars; household motor electric appliances; household refrigerators and freezers; and television sets and parts.

Commodity Distribution of Imports

by Degree of Use (US$ mn)

July/March 2001/2002 2002/2003

Value % Value % Change

(-) Total 10928.5 100.0 11241.2 100.0 312.7

1- Fuel, mineral oils and products 472.5 4.3 704.4 6.3 231.9 2- Raw materials 2357.9 21.6 1950.6 17.3 (407.3) 3- Intermediate goods 2879.1 26.4 3255.7 29.0 376.6 4- Investment goods 2408.3 22.0 2456.0 21.8 47.7 5- Consumer goods 2067.5 18.9 2011.3 17.9 (56.2) A. Durables 526.3 4.8 591.2 5.3 64.9 B. Non-durables 1541.2 14.1 1420.1 12.6 (121.1) 6- Miscellaneous items, unclassified 743.2 6.8 863.2 7.7 120.0

- 72 - 4/2/2/2: Geographical Distribution of Export

Proceeds and Import Payments

According to the geographical distribution of export proceeds, the USA was the main market of Egyptian exports during July/March 2002/2003, absorbing 37.2% of the total at a value of US$ 2.2 billion. The EU countries came second with US$ 2.0 billion or 34.0% of the total, headed by Italy, then the Netherlands, Germany, France, Spain and the UK. Arab countries came next at US$ 724.4 million or 12.3% of the total, mostly to Iraq, followed by Saudi Arabia, the UAE, Tunisia, Libya, Jordan, the Sudan and Syria. The Asian countries followed with US$ 555.9 million or 9.4%, with India ranking first, followed by Hong Kong, South Korea, Japan, China and Singapore. The share of other European countries reached US$ 284.4 million or 4.8%, with Switzerland at the top, followed by Turkey, Cyprus and Bulgaria. The African countries obtained a modest share of US$ 55.2 million or 0.9%.

Geographical Distribution of ExportsJuly / March 2002/2003

Asian Countries9.4%

Other Countries1.1%

African Countries0.9%

Arab Countries12.3%

U.S.A.37.2%

Other European Countries

4.8%

Russian Federation & C.I.S.

0.3%

EU34.0%

- 73 -

The EU countries continued to be the major exporter to Egypt, with a share of US$ 3.9 billion or 34.8% of total import payments. Germany topped this group, followed by the UK, France, Italy and the Netherlands. The USA contributed US$ 2.8 billion or 25.2% of the total. Asian countries ranked third, with US$ 1.7 billion or 14.9%. China headed this group, followed by Japan, South Korea, Malaysia and India. The share of other European countries was US$ 1.1 billion or 9.5%. Switzerland led this group, and then came Turkey, Romania and Poland. Imports from Arab countries amounted to US$ 610.6 million or 5.4%, with Saudi Arabia coming first, then the UAE and Algeria. Finally, imports from the Russian Federation and CIS represented 1.7% of total imports.

Geographical Distribution of ImportsJuly / March 2002/2003

EU34.8%

Other European Countries

9.5%

Russian Federation &

C.I.S.1.7%

U.S.A.25.2%

Arab Countries5.4%

African Countries0.6%

Other Countries7.9%

Asian Countries14.9%

- 74 -

Geographical Distribution of Commodity Transactions (US$ mn)

July/March Export Proceeds Import Payments Trade Balance

2001/2002 2002/2003 2001/2002 2002/2003 2001/2002 2002/2003

Aggregate Total 5294.2 5905.4 10928.5 11241.2 (5634.3) (5335.8) % 100.0 100.0 100.0 100.0 EU 1543.3 2010.8 4008.2 3911.9 (2464.9) (1901.1) % 29.2 34.0 36.7 34.8 Other European Countries 307.1 284.4 1039.4 1064.3 (732.3) (779.9) % 5.8 4.8 9.5 9.5 Russia Federation & CIS 28.2 18.0 196.3 190.1 (168.1) (172.1) % 0.5 0.3 1.8 1.7 USA 1917.8 2194.1 2737.3 2833.0 (819.5) (638.9) % 36.2 37.2 25.0 25.2 Arab Countries 725.8 724.4 519.4 610.6 206.4 113.8 % 13.7 12.3 4.8 5.4 Asian Countries 629.1 555.9 1595.0 1671.8 (965.9) (1115.9) % 11.9 9.4 14.6 14.9 African Countries 41.0 55.2 99.6 74.3 (58.6) (19.1) % 0.8 0.9 0.9 0.6 Other Countries & Regions 101.9 62.6 733.3 885.2 (631.4) (822.6) % 1.9 1.1 6.7 7.9

4/2/3: Services Balance and Transfers

The surplus on the services balance witnessed a 22.5% rise, to reach about

US$ 3.5 billion. This was an outcome of an 8.1% increase in service receipts to reach around US$ 7.7 billion, and a 1.4% drop in service payments to maintain, more or less, the same level of US$ 4.3 billion of the corresponding period.

- 75 -

Balance of Services (US$ mn)

July/March 2001/2002 2002/2003 Change (-)

Services Balance 2828.3 3465.0 636.7 Receipts 7169.0 7747.1 578.1 Transportation 2023.6 2182.8 159.2 Travel 2543.6 2887.9 344.3 Investment income 737.9 478.5 (259.4) Government receipts 136.8 192.0 55.2 Other receipts 1727.1 2005.9 278.8 Payments 4340.7 4282.1 (58.6) Transportation 320.4 273.0 (47.4) Travel 944.7 1085.9 141.2 Investment income 666.1 680.2 14.1 Government payments 541.6 340.5 (201.1) Other payments 1867.9 1902.5 (34.6)

The rise in service receipts came as a consequence of the increase in the

items of travel, transportation, government receipts and other receipts. Travel receipts went up by 13.5% to reach US$ 2.9* billion, as a result of the increase in the number of tourist nights by 4152 thousand, to reach 25.1 million against 21.0 million. On the other hand, the average spending per tourist a night declined to US$ 115/night during the period from US$ 121.4/night during the corresponding period. Transportation receipts edged up by 7.9% to reach US$ 2.2 billion, because of the rise in Suez Canal tolls by 17.1% to realize US$ 1.6 billion. Government receipts surged by 40.4% to post US$ 192.0 million. Other receipts** also rose by 16.1%, totaling US$ 2.0 billion, mainly because of the rise in the transfers to foreign companies, and in receipts of building and construction and communication services. However, investment income declined by 35.2% to post only US$ 478.5 million, as a result of lower interest rates on deposits of the banking system abroad. ________________________________ * Calculated on the basis of the number of tourist nights multiplied by the average spending per tourist a night. ** The main components of this item are the receipts of communication services, invisible receipts of EGPC,

receipts of foreign companies, legal and consultation fees, and agencies commissions and fees.

- 76 -

The downtrend in service payments occurred as a result of a 14.8% decline in transport payments to stand at US$ 273.0 million. This decline was due to lower transfers by foreign aviation and Egyptian navigation companies. Government payments retreated as well by 37.1%, to reach US$ 340.5 million. In addition, other payments* declined slightly by 1.9%, to remain almost at their level of the previous corresponding period. On the other hand, travel payments rose by 14.9% to US$ 1.1 billion, as a result of the increase in the expenses of tourism and medical treatment abroad. Investment income payments grew by 2.1%, to post US$ 0.7 billion, owing to an increase in interest and dividend transfers abroad, and transfers of the profits of foreign companies working in Egypt.

Net unrequited transfers retreated by 16.8%, to reach only US$ 2.6 billion during the period, against US$ 3.1 billion. This occurred because of the decrease in official transfers by 46.5%, totaling only US$ 409.8 million, as a result of the decline in cash transfers. Private transfers fell as well, by 7.0%, totaling US$ 2.2 billion, mostly from workers’ remittances from abroad.

Unrequited Transfers (US$ mn)

July/March

2001/2002 2002/2003 Change (-) Total 3105.1 2584.9 (520.2) 1- Official Transfers (Net) 766.2 409.8 (356.4) - Inward cash grants 317.6 11.5 (306.1) - Other inward grants 498.9 417.6 (81.3) - Outward grants -50.3 -19.3 31.0 2- Private Transfers (Net) 2338.9 2175.1 (163.8) - Workers’ remittances 2262.5 2213.9 (48.6) - Other transfers 90.6 26.5 (64.1) - Foreigners’ transfers abroad -14.2 -65.3 (51.1)

___________________________________ * Their main components are: transfers to abroad by Egyptian and foreign companies, service

payments for building and construction and communication services.

- 77 -

4/2/4: Capital and Financial Transactions

Capital and financial transactions with the foreign sector revealed a net

outflow of US$ 1.7 billion during the period, against US$ 94.2 million. This was attributed to a number of factors, such as the increase in the net outflow of other assets and liabilities (represented in the change in foreign assets and liabilities of bank, non-reserve foreign assets of the CBE, and the counterparts of items included in the current account), to reach US$ 2.0 billion, against US$ 1.5 billion. Meanwhile, banks and insurance companies in Egypt purchased sovereign bonds denominated in US dollar for US$ 272.5 million (a net outflow). The corresponding period witnessed the issuance of these bonds, which attracted net investments of US$ 1.1 billion of non-residents (a net inflow). Net outflows of portfolio investment* in Egypt posted US$ 206.0 million, against a net inflow of US$ 67.3 million. On the other hand, FDI** in Egypt realized a net inflow of US$ 578.1 million, against US$ 388.1 million.

____________________________ ∗ Representing foreigners’ net portfolio (according to the CMA statements) and foreign investors’ participations in

local enterprises by less than 10% of their capital according to the Fifth Edition of the IMF’s Balance of Payments Manual, September 1993.

∗∗ Representing flows of FDI in Egypt, minus capital repatriation, and foreign investors’ participation in the capital of local enterprises by 10% or more.

- 78 -

Capital and Financial Transactions (US$ mn)

July/March 2001/2002 2002/2003*

Capital and Financial Transactions -94.2 -1733.1 Direct Investment in Egypt (Net) 388.1 578.1 Direct Investment Abroad -7.7 -26.9 Portfolio Investment in Egypt (Net) 67.3 -206.0 Portfolio Investment Abroad -0.6 13.7 Other Investments (Net) -541.3 -2064.6

-Disbursements 1916.9 1216.2 • Medium- and long-term loans 283.0 560.7 International and regional institutions 233.9 427.0 Bilateral loans 49.1 133.7 • Suppliers' and buyers' credit, medium- and long-term 158.7 42.0 • Suppliers' and buyers' credit, short-term (net) 375.5 886.0 • Bonds** 1099.7 -272.5 - Repayments -966.1 -1261.3 • Medium- and long-term loans -786.9 -943.5 International institutions -239.8 -320.7 Bilateral loans -547.1 -622.8 • Suppliers' and buyers' credit, medium- and long-term -179.2 -317.8

- Other Assets -835.7 -1932.7 CBE -3.4 -28.5 Banks 673.1 24.2 Others -1505.4 -1928.4

- Other Liabilities -656.4 -86.8 CBE 5.2 2.8 Banks -661.6 -89.6

* Preliminary figures. ** US dollar bonds of the Egyptian government, guaranteed by the Public Treasury, and floated on

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$ one billion and a cost of 8.75%. These bonds were issued pursuant to Law no. 147 for 2001.

- 79 -

It is to be noted that the key factors influencing the capital and financial account can be summarized as follows: − Net foreign direct investment in Egypt increased by 49.0% to reach US$ 578.1

million, against US$ 388.1 million. This came as a result of the purchase of majority shares in three Egyptian companies by foreign companies, with a total of US$ 347.9 million. On the other hand, portfolio investment in Egypt realized a net outflow of US$ 206.0 million against a net inflow of US$ 67.3 million.

− Loans and facilities unfolded a decline of net repayments of US$ 45.1 million against net disbursements of US$ 950.8 million. This was due to the drop in total disbursements of loans and facilities, to account for US$ 1.2 billion, down from US$ 1.9 billion, and the rise in total repayments from US$ 1.0 billion to US$ 1.3 billion. Despite the decrease in the disbursements of loans and facilities in general, net disbursements of suppliers’ and buyers’ short-term credit increased by US$ 510.5 million, to reach US$ 886.0 million.

− Foreign assets at the banking system rose by US$ 4.3 million against a decline of US$ 669.7 million. This came about because of a decline in foreign assets at banks by US$ 24.2 million against US$ 673.1 million and an increase of non-reserve assets with the CBE by US$ 28.5 million against US$ 3.4 million.

− Other assets stepped up by US$ 1.9 billion against US$ 1.5 billion, as a main result of the difference between tourism revenues calculated on the basis of the number of tourist nights and the tourist's average spending per night, and their value according to banks’ statistics.

− Other liabilities dropped by US$ 86.8 million against US$ 656.4 million. This was caused by a drop of US$ 89.6 million :in banks’ foreign liabilities against US$ 661.6 million on the one hand, and the rise in the CBE’s by US$ 2.8 million against US$ 5.2 million, on the other.

- 80 -

4/3: International Financing

According to the international financing data, net resource inflows have remarkably dropped to US$ 696.2 million during July/March 2002/2003, against US$ 2.2 billion during the corresponding period of 2001/2002. This is mainly because during the corresponding period there was an inflow of US$ 1.1 billion in form of investments of non-resident financial institutions in dollar denominated sovereign bonds, issued by the Egyptian government at the beginning of the period at a par value of US$ 1.5 billion. During the period under review, these institutions sold some of their holdings of those bonds, representing an outflow of US$ 272.5 million, to resident financial institutions on the secondary market. Most items of resource inflows rolled back during the period. As such, net official grants scaled down by 46.5%, whereas portfolio investment in Egypt showed a net outflow of US$ 206.0 million, against a net inflow of US$ 67.3 million during the period. The decreased net inflows were offset neither by the improvement in net flows of FDI in Egypt during July/March 2002/2003 by 49.0% to reach US$ 578.1 million, nor by net disbursement of loans and facilities of US$ 227.4 million, against a net repayment of US$ 148.9 million during the corresponding period of the previous year.

- 81 -

Net Resource Flows (US$ mn)

July/March 2001/2002 2002/2003

Total Net Flows 2164.1 696.2- External Debt 950.8 -45.1• Bilateral loans -498.0 -489.1

Disbursements 49.1 133.7 Principal repayments -547.1 -622.8• International institutions’ loans -5.9 106.3

Disbursements 233.9 427.0 Principal repayments -239.8 -320.7• Medium- and long-term suppliers’ and buyers' credit -20.5 -275.8

Disbursements 158.7 42.0 Principal repayments -179.2 -317.8• Short-term suppliers’ and buyers' credit 375.5 886.0• Bonds 1099.7 -272.5

- Official Grants (Net) 766.2 409.8- Direct Investment in Egypt (Net) 388.1 578.1- Direct Investment Abroad -7.7 -26.9- Portfolio Investment in Egypt (Net) 67.3 -206.0- Portfolio Investment Abroad -0.6 -13.7

Total transfers of returns abroad have stepped up by 2.1%, to reach US$

680.2 million, because of the rise in the transfers of portfolio investment and direct investment. These outpaced the decline in payments of interest on deposits at Egyptian banks and on medium- and long-term external loans and facilities. Hence, net resource transfers (net flows less transfers of paid returns) recorded a meager inflow of US$ 16.0 million during July/March 2002/2003, against US$ 1.5 billion during the previous corresponding period.

The pick up in the transfers of portfolio investment stemmed from the

payment of the interest on dollar denominated bonds in the amount of US$ 125.6 million (US$ 62.8 million were paid in July 2002 and an equal sum was paid in January 2003), against US$ 62.8 million in the corresponding period of 2001/2002.

- 82 -

Net Resource Transfers from Abroad (US$ mn)

July/March 2001/2002 2002/2003

Net Transfers of Resources from Abroad 1498.0 16.0 - Net Inflows of Resources 2164.1 696.2 - Transferred Returns (Paid) on: -666.1 -680.2 External Loans and Facilities -511.7 -480.1 • Bilateral loans -354.3 -328.3 • International institutions’ loans -115.2 -117.3 • Suppliers’ and buyers' credit -42.2 -34.5

Interest on Deposits at Egyptian Banks -73.3 -37.7 Profit Transfers of Direct Investment -17.4 -35.3 Profit Transfers of Portfolio Investment -63.7 -127.1

4/3/1 Direct Investment in Egypt

Net FDI in Egypt stepped up during the period to US$ 578.1 million against

US$ 388.1 million, as an outcome of the increase in inflows from EU countries by US$ 221.5 million, reaching US$ 574.2 million or 99.3% of total FDI inflows. The period witnessed remarkably higher inflows of US$ 288.6 million from the Netherlands, with a relative importance of 49.9%. This came about following the purchase of a mega Egyptian company by a Dutch company during the period under review. Likewise, inflows from Spain rose by US$ 93.7 million, to US$ 177.5 million, with a relative importance of 30.7%. Inflows from the UK and Germany took the same trend, whereas those from France steeply declined.

The USA came second to the EU, with 35.8% higher inflows, amounting to US$ 182.9 million. Inflows from Arab countries recorded a modest US$ 4.5 million, against US$ 2.1 million.

Capital repatriations scaled up by US$ 88.0 million during the period under review, reaching US$ 191.2 million, against US$ 103.2 million during the previous period of comparison.

- 83 -

Direct Investment in Egypt (US$ mn)

July/March 2001/2002 2002/2003

Value % Value % Flows of Direct Investment in Egypt (Net) 388.1 100.0 578.1 100.0Inflows 491.3 126.6 769.3 133.1The USA 134.7 34.7 182.9 31.7The EU* 352.7 90.9 574.2 99.3

Germany 13.7 3.5 18.2 3.2France 207.8 53.5 61.3 10.6

The United Kingdom 7.0 1.8 27.2 4.7Italy 1.0 0.3 0.1 Greece 1.3 0.2Spain 83.8 21.6 177.5 30.7The Netherlands 0.6 0.2 288.6 49.9Portugal 38.8 10.0

Arab countries 2.1 0.5 4.5 0.7Saudi Arabia 0.8 0.2 1.6 0.3Jordan 1.3 0.2Bahrain 0.6 0.1Kuwait 1.2 0.3 0.7 0.1Others 0.1 0.0 0.3 0.0

Other countries 1.8 0.5 7.7 1.4Japan 2.0 0.4Canada 1.2 0.2Switzerland 3.5 0.6Other countries 1.8 0.5 1.0 0.2

Capital Repatriation -103.2 -26.6 -191.2 -33.1

* The European Union comprises 15 countries, namely: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Greece, the UK, Denmark and Sweden.

- 84 -

4/3/2 External Grants

Net official grants recorded US$ 409.8 million during the period, against

US$ 766.2 million, down by 46.5%. This came as a result of the retreat in transfers from the USA, Germany and Japan.

Official Transfers

(US$ mn) July/March 2001/2002 2002/2003 Change

Total 766.2 409.8 (356.4)

- Inward cash grants 317.6 11.5 (306.1)

- Other inward grants 498.9 417.6 (81.3)

- Outward grants -50.3 -19.3 31.0

According to the Ministry of International Cooperation, total grant

commitments slightly rose by 1.6%, reaching US$ 619.5 million. This reflected new commitments made with Japan, Italy, the EU, the Arab Fund for Economic and Social Development and the Global Environmental Facility, in addition to the higher value of commitments with Germany and Finland. On the other hand, commitments with the USA declined.

- 85 -

New Commitments and Net Flows of External Grants

(US$ mn)

July/March Commitments Actual Flows

2001/2002 2002/2003 2001/2002 2002/2003Net Inflows 766.2 409.8 Inflows 617.9 619.5 816.5 429.1 The USA 546.3 455.5 790.6 401. 7 Japan 74.4 10.3 7.4 France 0.2 Germany 13.7 15.1 12.9 15.8 The Netherlands 0.3 0.1 Finland 3.8 4.2 Italy 42.4 The UK 1.0 Switzerland 0.2 2.0 2.1 China 36.1 The EU 19.7 Arab Fund for Economic and Social Development 1.2 Global Environmental Facility 0.3 Canadian International Development Agency 14.9 Canada 0.2 1.0 Other countries 2.9 6.7 Capital Repatriation

-50.3 -19.3

A sectoral breakdown of grant commitments shows an increased value of commitments for the adjustment of sectoral policies, Environment Affairs Agency, the Ministry of Agriculture, and the health and population sector. In the meantime, new commitments were made for the potable water and sanitary sewage sector; the Ministries of Supply and Internal Trade; Foreign Trade; and Public Works and Water Resources. In contrast, grant commitments for the private sector remarkably declined.

- 86 -

Breakdown of External Grant Commitments (by Beneficiary)

(US$ mn) March/July 2001/2002 % 2002/2003 %

Total 617.9 100.0 619.5 100.0 Grants for sectoral policies adjustment 188.6 30.5 240.7 38.9

Private sector 200.0 32.4 49.4 8.0 Infrastructure 0.9 0.1 67.4 10.9 Communications and information (0.1) (0.0) (3.8) (0.6) Potable water and sanitary sewage (0.0) (0.0) (63.6) (10.3) Energy and electricity sector (0.8) (0.1) (0.0) (0.0) Housing and utilities 50.2 8.1 Public works and water resources 9.1 1.5 Education 57.8 9.4 31.7 5.1 Health and population 62.6 10.1 70.8 11.4 Agriculture 5.7 0.9 19.7 3.2 Commodity supply and internal trade 26.1 4.2

Foreign trade 25.3 4.1 Social affairs 7.8 1.3 6.8 1.1 Environment Affairs Agency 2.6 0.4 29.3 4.7 Social Development Fund 3.4 0.6 3.0 0.4 Others 38.3 6.2 40.2 6.5

- 87 -

4/3/3 : External Debt Egypt’s external debt (denominated in US dollar) totaled the equivalent of US$ 28.7 billion at the end of March 2003, with a slight rise of US$ 31.6 million over its level at the end of June 2002. This was mainly due to the effects of appreciation of most currencies of borrowing against the US dollar. These effects were, somehow, offset thanks to net repayments of US$ 658.6 million with respect to the medium and long-term loans and facilities (repayments equivalent of US$ 1.3 billion less disbursements of US$ 602.7 million). Moreover, the balance of the dollar denominated bonds decreased to reach only US$ 681.1 million at the end of March 2003 against US$ 953.6 million at the end of June 2002. This was due to the fact that, during the period under review, resident financial institutions purchased US$ 272.5 million of these bonds on the secondary market. A breakdown of Egypt’s external debt by creditor indicates that bilateral loans (rescheduled or non-rescheduled) and suppliers’ and buyers’ credit owed to Paris Club members represented 68.8% of the total. The balance of the debt due to these countries reached US$ 19.7 billion at the end of March 2003. Of this amount, 81.4% was owed to four countries namely USA, France, Japan, and Germany. In the meantime, debts due to non-members of the Paris Club (under bilateral loans) amounted to some US$ 975.8 million, or 3.4% of the total.

- 88 -

Structure of External Debt (US$ mn )

June 2002 March 2003 Balances at End of Value

Relative Importance

Value

Relative Importance

Change (-)

Total External Debt 28660.8 100.0 28692.4 100.0 31.6 Rescheduled bilateral debts 15336.4 53.5 15502.5 54.1 166.1 Concessional 7455.6 26.0 7453.9 26.0 (1.7) Non-concessional 7880.8 27.5 8048.6 28.1 167.8 Other bilateral loans 4057.2 14.2 4200.4 14.6 143.2 Paris Club countries 3405.0 11.9 3224.6 11.2 (180.4) Other countries 652.2 2.3 975.8 3.4 323.6 International and regional institutions 4697.4 16.4 4931.1 17.2 233.7 Suppliers’ and buyers’ credit 923.8 3.2 1017.8 3.5 94.0 Short-term loans 2150.0 7.5 2104.3 7.3 (45.7) Deposits 1338.5 4.7 1330.3 4.6 (8.2) Other facilities 811.5 2.8 774.0 2.7 (37.5) Sovereign bonds 953.6 3.3 681.1 2.4 (272.5) Debt of the private sector (non-guaranteed) 542.4 1.9 255.2 0.9 (287.2) The external debt due to international and regional institutions, amounted to about US$ 4.9 billion, or 17.2% of the total (91.7% by the public sector). The balance of short-term debts reached US$ 2.1 billion, or 7.3% of the total (55.4% by the private sector). Dollar denominated sovereign bonds retreated by US$ 272.5 million to reach merely US$ 681.1 million or 2.4% because resident financial institutions purchased some of these bonds on the secondary market. In addition, non-guaranteed debts of the private sector declined by US$ 287.2 million to stop at only US$ 255.2 million or 0.9 % of the total. The external debt of the private sector fell to US$ 1.9 billion at the end of March 2003, compared with about US$ 2.3 billion at the end of June 2002. As a result, the private sector’s external debt constituted only 6.6 %, against 8.2 %, of the total external debt.

- 89 -

0%20%40%60%80%

100%

%

2001 2002 2003

External Debt By Type End of March

Bilateral debt International & regional organizations

Short & Long term Facilities Deposits

Sovereign bonds

____________________________________________________________________________Short, medium & long-term facilities include suppliers' & buyers' M&L-term facilities, short-term facilities andmedium and long-term debt of the private sector (non guaranteed)

External Debt

By Maturity & Debtor Sector End of March

05000

100001500020000250003000035000

2001 2002 2003

US$ mn

Medium & Long-term External Debt Short-term External Debt

Public Sector Debt Private Sector Debt

- 90 - The distribution of the external debt by creditor countries and international and regional institutions denotes that the volume of debt due to EU countries reached 37.8% of the total. USA came next at 18.4%, followed by Japan (11.8%), then the IDA (4.7%). Debts due to the Arab countries combined totaled 5.1% only.

External Debt by Main Creditor (US$ mn) At End of June

2002 % March 2003 %

Total External Debt 28660.8 100.0 28692.4 100.0 USA 5537.4 19.3 5284.7 18.4 Japan 3562.5 12.4 3379.8 11.8 EU Countries, of which 10483.9 36.6 10853.9 37.8 France 4490.0 15.7 4710.7 16.4 Germany 2687.2 9.4 2920.7 10.2 Italy 1032.1 3.6 972.9 3.4 Spain 861.2 3.0 861.1 3.0 U.K. 453.8 1.6 406.3 1.4 Austria 552.5 1.9 561.8 2.0 Arab Countries, of which 1128.6 3.9 1471.7 5.1 Saudi Arabia 305.4 1.1 180.0 0.6 United Arab Emirates 156.2 0.5 145.3 0.5 Bahrain 48.3 0.2 350.9 1.2 Kuwait 333.2 1.2 353.0 1.2 International and Regional Institutions, of which 4697.4 16.4 4931.1 17.2 IDA. 1294.7 4.5 1335.4 4.7 Arab Fund for economic and social development

939.3 3.3 916.6 3.2

European Investment Bank 734.7 2.6 828.7 2.9 World Bank 576.5 2.0 540.1 1.9 AMF 295.5 1.0 363.0 1.3 African Development Fund and Bank

629.5 2.2 553.4 1.9

Islamic Development Bank (Jeddah) 125.4 0.4 289.2 1.0 Sovereign Bonds 953.6 3.3 681.1 2.4 Other Countries and Institutions 2297.4 8.1 2090.1 7.3

- 91-

External debt service increased by US$ 263.5 million, to reach US$ 1.7 billion. This was mainly due to an increase of US$ 295.1 million in principal repayments, and a decrease of US$ 31.6 million in interest payments. Consequently, the ratio of the debt service to current receipts and to export proceeds of goods and services rose to 10.7% against 9.5% and to 12.8% against 11.9%, respectively. As for the other indicators of the external debt, the ratio of short-term external debt to the total debt dropped to 7.3% against 8.0%, and to net international reserves to 14.9% against 15.9%.

External Debt IndicatorsJuly / March

0

3

5

8

10

13

15

18

2000/2001 2001/2002 2002/2003

Short-term Debt / External Debt (end of period)Short-term Debt / Net International Reserves (end of period)Debt Services / Exports (G & S) %Debt Services / Current Receipts %

%

- 92 -

Main Indicators of External Debt ( %)

July/March 2000/2001 2001/2002 2002/2003 Debt service/exports of goods and services

10.0

11.9

12.8

Debt service/current receipts and transfers

8.5

9.5

10.7

Interest payments/exports of goods and services

3.8

4.1

3.5

Interest payments/current receipts and transfers

3.2

3.3

3.0

Short-term debt/external debt 6.3 8.0 7.3 Short-term debt/net international reserves

11.7

15.9

14.9

Within the context of rescheduling agreements, principal repayments rose to

reach US$ 470.8 million against US$ 418.7 million, whereas interest payments rolled back from US$ 294.2 million to US$ 267.2 million.

During July/March 2002/2003, total commitments increased to US$ 1046.9

million against US$ 848.0 million, as commitments on loans of international and regional institutions markedly surged to US$ 670.5 million or 64.0% of total commitments, against US$ 293.9 million during the corresponding period of the previous FY. In the meantime, bilateral loans dropped to US$ 73.9 million, against US$ 216.6 million. Medium-and long-term suppliers’ and buyers’ credit also shrank from US$ 337.5 million to US$ 302.5 million during this period.

External debt by main currency (US dollar, Japanese yen, and euro) denotes

that the US dollar accounted for the bulk of the total debt, with a relative importance of 36.6%. This is due to the outstanding obligations in US$ to creditors other than the USA. Next came the euro with 30.1%, followed by the Japanese yen with 11.6%, then the Kuwaiti dinar and the SDR with 4.3% each.

- 93 -

External Debt by Major CurrenciesEnd of March 2003

SDRs4.3% Private sector's

m.&l.term debt (Non guaranteed)

0.9%

Short-term Debt7.3%

Other Currencies2.0%US$

36.6%

Euro30.1%

Japanese Yen11.6%

Kuwaiti Dinar4.3%

Pound Sterling0.9%

Swiss Franc2.0%

__________________________________________________________________

- Dollar share includes International Arab Bank Deposit and sovereign bonds. - Private sector (nonguaranted) debt and short-term debt are not available in different currencies.

Distribution of external debt by currency shows that the outstanding balance

of the debts denominated in the dollar and the Japanese yen decreased at the end of March 2003, in comparison with the end of June 2002, while that denominated in the euro and SDRs increased.

- 94 -

Distribution of External Debt by Main Currency End of June End of March 2002 % 2003 % Total 28660.8 100 28692.4 100US Dollar* *10941.4 38.1 10509.4 36.6Canadian Dollar 134.0 0.5 136.0 0.5Australian Dollar 120.0 0.4 124.0 0.4Swiss Franc 551.0 1.9 584.8 2.0Pound Sterling 521.0 0.9 242.3 0.9Japanese Yen 3384.0 11.8 3340.7 11.6Danish Krone 109.0 0.4 116.6 0.4Norwegian Krone 28.0 0.1 27.9 0.1Swedish Krona 42.0 0.1 42.0 0.2Kuwaiti Dinar 1248.0 4.4 1245.4 4.3Saudi Riyal 50.0 0.2 46.8 0.2UAE Dirham 58.0 0.2 56.6 0.2Euro 7948.0 27.7 8627.3 30.1SDRs 1104.0 3.9 1233.1 4.3Medium-and long-term debt of the private sector (non-guaranteed)** 542.4

1.9

255.2 0.9

Total short-term debt** 2150.0 7.5 2104.3 7.3*Includes the Arab International Bank’s deposit and dollar denominated sovereign bonds. *Not available in different currencies.

- 95 -

5- Cotton 5/1: Domestic Developments

The statistics provided by the cotton relevant authorities on the demand and

supply of the cotton crop for 2002/2003 season, according to the preliminary estimates from the beginning of the season till March 2003, reveal the following when compared with the final estimates of the previous season. 5/1/1: Production

Estimates of the Ministry of Agriculture indicate that the area cultivated in

cotton increased by 1.2% during the 2002/2003 season to reach 740 thousand feddans. The area cultivated with extra-long staple accounted for 23% of the total, with an increase of 39.3%, and with long-staple for 77%, with a drop of 6.4%.

Area and Production of all Cotton Varieties Area*

(thousand feddans) Production**

(thousand metric cantars)

2001/2002

Final

2002/2003 Revised

Preliminary Estimates

Change + (-) %

2001/2002

Final

2002/2003 Revised

Preliminary Estimates

Change + (-) %

Total 731 100.0 740 100.0 1.2 6263 100.0 5767 100.0 (7.9)

Extra-long staple 122 16.7 170 23.0 39.3 1025 16.4 1341 23.3 30.8 Long staple 609 83.3 570 77.0 (6.4) 5238 83.6 4426 76.7 (15.5)

Source: CBE (Alexandria Branch), Securities and Cotton Department. * Ministry of Agriculture and Land Reclamation. **The Holding Co. for Cotton, Yarn, Textiles, and Clothes.

According to the estimates of the Holding Co. for Cotton, Yarn, Textiles, and

Clothes, the total production reached 5.8 million metric cantars, with a decline of 7.9% due to the fall in the average productivity per feddan from 8.6 cantars to 7.8 cantars.

- 96 -

5/1/2: Stock and Total Supply

Total supply of raw cotton rose by 9.3% to reach 8.0 million metric cantars,

covering thereby the needs of both domestic consumption and exportation. The increase was contributed by the remarkable growth in the volume of the opening stock of the season by 109.1% over the level of the previous season, to reach 2.3 million metric cantars.

Total Supply (thousand metric cantars)

2001/2002 Season

Final

2002/2003 Season Revised

Preliminary Estimates

Change +(-)

% Total Supply 7345 8030 9.3 Opening stock 1082 2263 109.1 Crop 6263 5767 (7.9)

Source: CBE (Alexandria Branch), Securities and Cotton Department.

Egyptian Cotton Position

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Opening Stock Crop DomesticConsumption

ExportCommitments

Season 2001/2002 ( Final ) Season 2002/2003

Mn. Metric Cantars

Prel. Estimate

TargetedTargeted

- 97 -

5/1/3: Domestic Consumption

Local mills received 3.1 million metric cantars from the beginning of the

season in Sept. 2002 until the end of March 2003. This constitutes a rise of 82.4% over the level of the corresponding period of the previous season. The said amount represents 80.6% of the total volume targeted for the whole season and exceeds the consumption of these mills in all the previous season by 5.4%. This was due to two main factors. The cotton price facilities, which the government continued to provide for cotton growers who delivered their crop to local mills is one factor. The other is the successful efforts made to promote the exports of yarn and raw cotton (in line with the state’s policy to encourage exports and rationalize imports).

Total Used (thousand metric cantars)

2001/2002 Season 2002/2003 Season Change %

March/March

till its endUp to

31/3/2002 targeted till

31/3/2003 2002/2003 Total Used 5082 3270 6300 6454 97.4 Local mills 2905 1679 3800 3062 82.4 Export commitments 2177 1591 2500 3392 113.2

Source: Ibid.

5/1/4: Export Commitments

Total export commitments reached 3.4 million metric cantars from the beginning of the season until the end of March 2003, exceeding thereby the amount targeted for exportation during the whole season by more than 35.7%, and the level of the corresponding period of the previous season by 113%. This is due to the competitive prices of the Egyptian raw cotton on the international market, in response to the higher demand on raw cotton, following recovery of the global economy. In addition, the spinners tended to secure their needs of certain varieties in anticipation of unfavorable developments in the Middle East.

- 98 -

These commitments were made by the companies of the public business sector (accounting for 54% of the total) and of the private business sector (accounting for the remainder). Extra-long staple commitments represented about 34% of the total, with Giza 70 at the top. Commitments on the long staple - headed by Giza 86 - constituted 64% of the total.

Export Commitments by Importing Countries 2001/2002 Season 2002/2003 Season Till end of March 2002 Till end of March 2003 Total (thousand metric cantars)

1591

3392 EU Countries, of which 28.3% 22.5% Italy 17.2% 16.9% Germany 4.2% 2.1% Other European Countries, of which 18.2% 18.2% Switzerland 11.1% 14.3% Turkey 6.7% 2.7% Asian Countries, of which 40.7% 48.6% India 15.1% 26.2% South Korea 6.7% 7.7% USA 8.7% 9.2%

Others 4.1% 1.5%

Source: Ibid.

The Asian group came in the forefront of the Egyptian cotton importers, accounting for 48.6% of total commitments. India was the main importing country within the group, with a share of 26.2%. The group of the EU countries came next with 22.5%, headed by Italy with a share of 16.9%. The group of the other European countries followed with 18.2%. Switzerland topped the group with a portion of 14.3%. USA commitments continued to increase, reaching 9.2% of the total against 8.7%.

- 99 -

Egyptian Cotton Exporting Prices and Commitments (cent/libra)

Extra-long Staple Giza

Long Staple Giza

Total Commitments

45 76 70 88 77 86 89 85 80/83/90 Bale

1000 Cantars

1st - 15th week 14/9-29/12/2002 - - 97 94 - 83 78 76 72 338897 221316th - 20th week 30/12/2002-1/2/2003 - - 92 88 - 75 72 70 66 62021 40521st- 23rd week 2-23/2/2003 - - 93 89 - 76 73 71 66 58652 38324th- 26th week 24/2-15/3/2003 - - 95 90 - 78 75 73 68 53446 34927th- 28th week 16-31/3/2003 - - 95 90 - 81 78 76 71 6432 42Total 519448 3392Source: Ibid. N.B.: Prices for Good/ Fully Good The bale = 6.53 metric cantars. Export prices of the Egyptian cotton as announced by the Federation of Cotton Exporters were lowered between five and eight cents/libra from the beginning of the season in September until the end of December 2002. They were raised between two and six cents/libra during the period of January/ March 2003, in line with world price trends.

- 100 -

5/2: International Developments

The revised estimates of the International Cotton Advisory Commission (ICAC) for the 2002/2003 season indicate that the opening stock of the season increased 14.3% to reach 48.9 million bales, and the international output declined by 11.2%, to reach 87.7 million bales. The decline was a principal result of a smaller cotton cultivated area, and a contraction in the average productivity per feddan due to unfavorable weather conditions in most of the cotton producing countries. This led to a reduction in the volume of world supply by 3.5% to reach 136.6 million bales.

The ICAC estimates also point to the increase in the world consumption of raw cotton by 3.3%, to reach 95.8 million bales. This was ascribed to higher consumption in China, Turkey, India and Pakistan, and an expected rise in the prices of oil products, including synthetic fibers, because of the uptrend of world oil prices in the aftermath of the war in Iraq. As a result, the carryover at the end of the season was expected to decline by 16.6% to reach 40.8 million bales.

Statistical Position of World Cotton (million bales)

2001/2002 Season

Actual

2002/2003 Season Revised

Preliminary Estimates

Change +(-)%

Opening Stock 42.8 48.9 14.3 World output 98.8 87.7 (11.2) Total Supply 141.6 136.6 (3.5) World consumption 92.7 95.8 3.3 Carry over at the end of the season

48.9

40.8

(16.6)

World Trade* 29.8 29.2 (2.0) Source: International Cotton Advisory Commission. *Calculated on the basis of average exports and imports.

- 101 -

From the beginning of the season (August 2002) to the end of March 2003, world prices of raw cotton displayed a broad spectrum of trends, ranging from increase to decline to extensive fluctuations. However, by the end of the season, cotton prices took a steady upward trend. This was attributed to the expected increase in the international demand for raw cotton, and the rise of its prices on the N.Y. Futures. Hence, importers hurried to secure their needs for fear that the Middle East tensions would adversely affect the international trade.

Based on the above estimates of output, consumption and the carryover at the end of the season, the ICAC expects a 2% decline in the volume of international trade to reach 29.2 million bales.

- 102 -

6- Tourism

Since the beginning of FY 2002/2003, and after containing the adverse impact of a series of international and regional crises, Egyptian tourism managed to achieve positive growth rates. With the increased probabilities of the war in the region, the concerned authorities used their good international relations to exempt the Egyptian airspace from the insurance fee increases, being outside the area of expected military operations. Moreover, the foreign charter flight promotion program, which proved to be successful in overcoming the tourism crises, was extended to mid-Oct. 2003.

The CAPMAS statistics for July/March 2002/2003 showed a rise in the

number of arrivals by 30.7% and of tourist nights of departures by 19.8% as compared with the corresponding period of the previous fiscal year. This contributed to raising tourism revenues by 13.5% to reach US$ 2887.9 million, despite a drop of 5.2% in the estimate of the average tourist spending a night, and of 7.2% in the average tourist stay.

Tourism Indicators

July/March

2001/2002Change +(-)% 2002/2003

Change +(-)%

Number of arrivals (000s)* 3195 (22.2) 4176 30.7 Number of departures (000s) 3018 (12.1) 3937 30.5 Number of tourist nights of departure (in 000s) 20961 (15.6) 25112 19.8 Estimate of the average tourist spending a night (US$) 121.35 (8.5) 115 (5.2) Tourism revenues (US$ mn) 2543.6 (22.8) 2887.9 13.5 Average tourist stay (night) 6.9 (4.2) 6.4 (7.2)

.Source: CAPMAS and CBE. *Excluding non-resident Egyptians coming for temporary purposes.

- 103 -

6/1: Number of Tourists The number of arrivals from all tourist groups totaled 4.2 million during the

period under review, with a rise of 981 thousand tourists or 30.7% when compared with the corresponding period of the previous fiscal year.

The group of the European markets contributed the bulk (795 thousand or

39.8%) of the increase and continued to account for the highest relative weight of tourist flows to Egypt. Hence, arrivals from the traditional markets in the countries of Western Europe went up by 533 thousand tourists or 31.8%. The increase was mainly in the arrivals from Italy by 65.9%, UK (27.1%), and France (25.1%). The new markets in Eastern Europe showed a rise in the number of arrivals by 262 thousand or 80.6%, mainly from Russia and the Commonwealth of Independent States.

Number of Arrivals

(in thousand) July/March

2001/2002 Change 2002/2003 Number Relative

weight + (-) % Number Relative

weight

Change + (-) %

Total 3195 100.0 (22.2) 4176 100.0 30.7 By Period July/Sept. 1339 41.9 (9.2) 1566 37.5 17.0 Oct./Dec. 802 25.1 (41.2) 1426 34.1 77.8 Jan./March 1054 33.0 (16.7) 1184 28.4 12.3 By Group Europe 1999 62.6 (24.8) 2794 66.9 39.8 Middle East 794 24.8 (7.4) 908 21.7 14.4 Africa 105 3.3 (2.8) 128 3.1 21.9 The Americas 141 4.4 (42.2) 130 3.1 (7.8) Asia and the Pacific 154 4.8 (35.3) 214 5.1 39.0 Others 2 0.1 100.0 2 0.1 0.0

Source: CAPMAS.

- 104 -

Regarding the Middle East group, it maintained its second position among the tourist exporting markets. Its number of arrivals scaled up by 114 thousand or 14.4%, due to the rise in the number of arrivals from the majority of its markets especially Libya (by 43 thousand or 30.5%). Other countries of the group, especially Saudi Arabia, Kuwait and Palestine achieved growth rates ranging between 10.6% and 21.9%.

The markets of Asia and the Pacific contributed 60 thousand tourists or 39%

of the increase during the period, mostly from China with a growth rate of 100%, then Japan (69.0%), South Korea (53.3%), and India (20.0%). This was a result of the growing relations between Egypt and these countries in several fields over the last quarter of the period.

The arrivals from the African group rose by 23 thousand or 21.9% because

of the increase in the number of tourists from all the markets of the group mainly Tunisia, Sudan and Morocco at rates ranging from 6.3% to 36.4%.

As for the Americas group, tourist flows remained under the impact of Sept.

2001 attacks and their negative repercussions. Hence, arrivals from these markets dropped by 11 thousand or 7.8%. Most of the decline was in the arrivals from the USA (by 8 thousand or 8.2%), and from Latin America (5 thousand or 23.8%). Conversely, the Canadian tourists continued to show an increase (up by 2 thousand or 8.7%).

- 105 -

6/2: Tourist Nights The total number of tourist nights spent by all the departure groups during

the period July/March of FY 2002/2003 went up by 4.2 million or 19.8% to amount to 25 million nights, in spite of the drop of the average tourist stay to 6.4 nights against 6.9 nights in the corresponding period.

Tourist Nights and Revenues

0

1000

2000

3000

4000

5000

6000

Jul2001

Aug Sep Oct Nov Dec Jan2002

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan2003

Feb Mar0

100

200

300

400

500

600

Revenues( US$ million ) Nights ( Thousands ) Tourists ( Thousands )

( Thousand ) ( Thousand )

- 106 -

Number of Tourist Nights

(in thousand) July/March

2001/2002 Change 2002/2003

Number Relative weight

+ (-) % Number Relative weight

Change +(-)%

Total 20961 100.0 (15.6) 52112 100.0 19.8 By Period July/Sept. 8899 42.5 (2.4) 9902 39.4 11.3 Oct./Dec. 5017 23.9 (34.7) 8136 32.4 62.2 Jan./March 7045 33.6 (12.2) 7074 28.2 0.4 By Group Europe 13318 63.5 (20.2) 17231 68.6 29.4 Middle East 4967 23.7 3.2 5420 21.6 9.1 Africa 799 3.8 13.2 706 2.8 (11.6) The Americas 1011 4.8 (32.5) 843 3.4 (16.6) Asia and the Pacific 856 4.1 (23.5) 903 3.6 5.5 Others 10 0.1 25.0 9 0.0 (10.0)

Source: CAPMAS. The upward trend in the number of tourist nights by departure from all

groups was due to the rise in the number of arrivals. Hence, the tourist nights by departures from the European group climbed by 3.9 million nights or 29.4% as compared with the corresponding period. The Western European markets contributed 2.7 million nights or 23.2% of the increase, which mostly came from Italy (60.2%), followed by Spain (47.7%), then the UK (17.0%), and France (10.3%). Also, the number of tourist nights by departures from the new markets in Eastern Europe, chiefly Russia and CIS mounted by 1.2 million nights or 71.4%.

- 107 -

The Middle East markets contributed 453 thousand nights or 9.1% of the rise in the number of tourist nights spent by departure in the period. Libya accounted for the bulk of the increase (513 thousand nights or 100.2%). Other markets as Palestine, Jordan, Kuwait and Saudi Arabia contributed slight increases between 0.7% and 10.7%. On the other hand, the number of tourist nights by departure from Syria dropped by 12% and from the rest of the markets of the group by 15.3%; a matter that adversely affected the whole group during the period.

The increase contributed by the markets of Asia and the Pacific reached 47

thousand nights or 5.5%. The most important countries of the group were China, achieving a growth rate of 86.5%, followed by South Korea (43.2%), then Japan (32.1%). The number of tourist nights of departures of Australia, India and other countries within the group declined in the range of 7.9% to 19.9%.

Because of the drop in the number of arrivals from the Americas group, the

number of tourist nights of departures decreased, reaching 168 thousand or 16.6%. The decrease covered all markets within the group including Canada - despite the increase of its arrivals during the period - at rates ranging between 7.9% and 19.0%.

The African group, especially Tunisia, South Africa, Sudan and Morocco,

manifested a drop in the range of 2.5% to 13.2% in the number of tourist nights by departure.

International Developments

- 109 -

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

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

During the year ending March 2003, global economic growth rates witnessed some improvement, mainly in the first half of the year, after a slowdown during the last quarter of the FY 2002, and the first quarter of FY 2003. The improvement in the first half of the year was spurred by the rise in private consumption, and investments in the housing sector due to low interest rates. The continuous improvement in the performance of the Chinese economy, and the rise in the growth rates in many of the emerging Asian economies (e.g. Malaysia, Philippines, Singapore, and Taiwan), and in some Latin American countries (e.g. Brazil, Argentina, and Chile) contributed to the rise. This came as a culmination of the efforts exerted by the governments of these countries to contain their financial crises. For instance, the Brazilian government adopted a set of measures to reinforce the investors’ confidence in the Brazilian economy, including the adoption of a tight fiscal policy to contain the widened fisical deficit, and to regain their confidence in its ability to serve its debts. At the same time, the Central Bank of Brazil raised the interest rates to ease the inflationary pressures and strengthen the local currency. The slowdown in the global economy during the second quarter of the year ending March 2003 was mainly related to the heightened tension in the Middle East, the growing anticipation of an imminent war in Iraq (until its outbreak on 20 March 2003), with its repercussions and the associated uncertainity worldwide. Such developments had an obvious adverse impact on the growth rates of investment and corporate earnings in many of the developed and developing countries, in spite of the low interest rates. This was a principal cause for the decline in the performance of the financial markets for the third consecutive year. As such, Nasdaq retreated by 75%, and the German DAX by 70% compared with March 2000. Moreover, the Japanese Topix hit, in March 2003, its lowest level for the last 20 years. Morgan Stanley Capital International index (denominated in the US dollar) lost 4.9% during Jan/March 2003. This was coupled with a decline in

- 110 - the value of the new issues of shares on the international stock exchanges, and in the market capital value of quoted shares. The total value of the shares issued in the international capital markets decreased by US$ 17 billion worth (of which the USA accounted for US$ 7 billion) or 83% during the first quarter of 2003, as compared with the corresponding period of 2002, to reach merely US$ 3.5 billion. Moreover, their market capital value on the international markets fell by US$ 22.3 billion (of which, the USA accounted for US$ 7.7 billion) or 56.6% to only US$ 17.1 billion. Among the key adverse developments witnessed in the second half of the year, ending March 2003 was Venezuela’s continuous suffering from the repercussions of the crisis that hit the country in late 2002. This crisis was mainly attributed to the strikes of many economic sectors, especially the oil, starting from Dec. 2002 to early Feb. 2003. Consequently, Venezuela’s exports of oil stopped during the period of the strikes, and the President of Venezuela issued a decree, in Jan. 2003, to suspend dealing in the foreign exchange for 5 days. Moreover, several steps were taken to review the measures of imposing restrictions on the foreign exchange system to limit capital outflows, and to mitigate the steep decline of the Bolivar, that lost almost 32% during Jan. 2003 against the US dollar. Developments in the economic growth rates across the major industrial countries during the year ending March 2003 reveal an increase in the growth rates of all countries, chiefly in the first half of the year. In the USA, the economic growth rate rose from 1.5% during the year ending March 2002 to 2% during the year ending March 2003. However, the largest part of the rise in the economic growth rate was seen in the first half of the year ending March 2003. GDP real growth rate was confined to 0.4% during Jan./March 2003, which is remarkably below the 1.2% in the corresponding period of 2002. In the USA, the 4.6% rise in the economic growth during the year ending March 2003 against 3.9% during the year ending March 2002 was largely due to the acceleration in private consumption, the main propeller of the American economy. Along with the stronger productivity of workers per hour, the rise was also stimulated by the pick up in the housing sector’s investments, mainly due to the low interest rates of the US dollar, under the expansionary monetary policy adopted by the Federal Reserves Board.

- 111 - The performance of the American economy slowed down, during the second half of the year ending March 2003, principally because of the negative impact of the period preceding the war on Iraq and its aftereffects and the noticeably associated hikes in energy prices; a matter that adversely affected the domestic demand. The slowdown was also due to the continuous retreat in the growth rates of investments and lower profits of many American companies, despite the low interest rates on the US dollar. Consequently, equity prices on the American stock exchanges declined during the period Jan./March 2003. The slackened performance of the American economy during the first quarter of 2003 was traced back to the sharp fall of 3.2% in the value of goods and services exports, against a 5.0% growth during the corresponding period. In Canada, the economic growth rate increased from 2.1% during the year ending March 2002 to 2.6% during the year ending March 2003. Such an improvement was attributed to the tendency of many companies to rebuild up their inventories. This contributed to the surge of gross investments to reach 15.2% during the year ending March 2003, against a modest growth of 2.1% during the year ending March 2002. The better performance of the Canadian economy was also helped by the 6.4% rise in the private consumption against 4.4% a year earlier, as well as the marked increase of 3.9% in the exports of goods and services during the year under review compared with a decline of 8.8% during the year of comparison. The economic growth rate of the euro area as a whole rose to reach 0.8% during the year ending March 2003 from 0.1% a year earlier. Such an increase was mainly confined to the first half of the year due to the obvious decline in the growth rate of the area during Oct./Dec.2002. Moreover, the economy did not achieve any growth during Jan./March 2003. The weaker economic performance of the euro area was a chief outcome of the state of uncertainty prevalent worldwide, along with its adverse implications for the European investment and corporate earnings. This was particularly evident with the rise in energy prices and the appreciation of the euro vis-à-vis the US dollar, which eventually led to a weak competitiveness of the euro exports and a soft external demand on its products. With the decline in the performance of European companies, the credit rating of some companies was lowered to negative levels during Jan./March 2003, a matter that implies lower quality of bank credit to these companies. Against these

- 112 - developments, equity prices showed a decline on major European stock exchanges during the period under review. As such, the average prices of German equities retreated by 15.9%, the French by 14.9%, and the British by 6.9% during the period.

Economic Growth Rates (%)

Year Ending at End of March 2002 March 2003

USA 1.5 2.0 Canada 2.1 2.6 Japan (1.6) 2.6 Germany (1.2) 0.2 France 0.3 1.0 Italy 0.1 0.8 UK 1.0 2.2 Euro Area 0.1 0.8

Source : The Economist, various issues. In the UK, the economic growth rate rose to reach 2.2% during the year ending March 2003, against 1.0% during the year ending March 2002. However, the growth rate was no more than 0.2% during Jan./March 2003. The rise in the British economic growth during the year was mainly related to the recovery of the building and construction sector, and the 3.4% pick up in the private consumption during the year ending March 2003 against 0.6% during the year ending March 2002. However, the economic growth declined during the last quarter of the year under review as a main result of the sluggish performance of the services sector and the weaker growth of goods and services exports. In Japan, the economic growth rate rose to a positive 2.6% during the year ending March 2003, switching from a negative 1.6% during the year ending March 2002. Yet, this rise, mainly spurred by the improvement in the exports growth, was concentrated in the first half of the year ending March 2003. As such, the Japanese economic growth rate was confined to 0.4% during Oct./Dec. 2002, and to 0.1% during Jan./March 2003. This indicated that the growth of the economy was not

- 113 - sufficient to generate the necessary momentum for overcoming its recession. This is especially true with the continuous decline, although at a lower pace, in the private consumption, reaching a negative 0.2% during the year ending March 2003 against a negative 0.7% during the year ending March 2002. The private investment also continued to slow down, although at a lower pace, to reach a negative 3.4% against a negative 10.7% a year earlier. Moreover, the inflation rate continued to be negative. The improvement in the performance of the Japanese economy was greatly impeded by the persistent problem of the non-performing banking loans, the sluggish performance of the global economy that adversely affected the performance and profits of the Japanese companies, as well as the uncertainty prevailing in the international markets. Such repercussions led to a marked decline in the prices of the corporate equities on the Japanese stock exchanges. As such, Nikkei index retreated during March 2003 to hit its lowest level since 1992 .Consequently, many Japanese banks incurred high loses as they held large portfolios, of which these corporate equities accounted for the bulk. Within the context of the efforts exerted to improve the performance of the Japanese capital markets and to limit the size of banks’ losses, the Bank of Japan established a fund for purchasing some of the corporate equities held at banks in Nov. 2002. Hence, the total volume of the equities purchased during Jan./March 2003 reached about ¥ one trillion (US$ 8.4 billion worth). Moreover, Japanese banks were required, during the period, that their investments in corporate equities not to exceed their core capital, by Sept. 2004. Unemployment increased in the USA, Japan and in the euro area as a whole in March 2003 as compared with March 2002. In contrast, it decreased in Canada, and remained unchanged in the UK. The increase in unemployment in many of the main industrial countries correlated with the sluggish performance of their economies during the second half of the year ending March 2003, compared with the first half of the same year. The continuous fall in investment growth rates in some of these countries led many companies operating in these countries to reduce the costs of their current operations along with the number of employees therein.

- 114 -

Inflation and Unemployment

Annually Inflation (%) Unemployment (%)

Year Ending at End of

March 2002 March 2003 March 2002 March 2003 USA 1.5 3.0 5.7 5.8 Canada 1.8 4.3 7.7 7.3 Japan (1.2) (0.1) 5.2 5.4 Germany 1.8 1.2 9.6 10.6 France 2.1 2.6 9.1 9.3 Italy 2.5 2.7 9.0(Jan.) 9.0(Jan.) UK 1.3 3.1 5.1 5.1 Euro Area 2.4 2.4 8.4 8.7

Source: The Economist, various issues & IFS, May 2003. As for inflation rates in the major industrial countries, they rose in the USA from 1.5% during the year ending March 2002, to 3.0% during the year ending March 2003, in Canada from 1.8% to 4.3%, and in the UK from 1.3% to 3.1%. However, the inflation rate remained stable at 2.4% in the euro area, and continued to be negative in Japan. 7/1/2: Primary Commodity Prices

The primary commodity price index* (1995=100) went up by 1.0% during the first quarter of 2003, because of a surge in the price index of metals by 2.9%, and agricultural raw materials by 2.4%. However, the price index of beverages dropped by 0.9%, and foodstuffs by 0.8%. _______________ * Excluding energy prices.

- 115 - The increase in metal prices reflects a rise in the prices of crude oil (8.7%) tin (8.7%), copper (4.1%), lead (3.1%), and gold (2.7%). The increase in oil prices was principally referred to the rising tension in the Middle East; the data indicating a decline in the USA crude oil reserve during Jan./March 2003; and the higher demand on heating fuel because of the cold weather during the same period. Moreover, the agricultural raw material prices soared, fuelled by the rise in the prices of rubber (26.1%), and cotton (10.5%). However, wool prices showed a decrease (3.9%). The decline in the prices of beverages was mainly in coffee (7.0%), and cocoa (1.8%), whereas tea prices went up by 4.6%. Prices of foodstuffs also dropped because of the decrease in the prices of wheat (16.1%). However, there was a rise in the prices of meat (7.0%), and rice (6.2%)

- 116 -

Commodity Price Indices*

2002 2003 Change Rate % June Sept. Dec. March Jan./March

Foodstuffs Wheat (USA) 47.6 106.1 95.5 80.1 (16.1) Rice (Bangkok) 63.0 59.2 57.8 61.4 6.2 Meat (Australia) 108.5 107.0 103.1 110.3 7.0 Soya beans (USA) 79.1 91.8 92.9 92.9 0.0 Total 79.9 91.7 85.5 84.8 (0.8) Beverages Cocoa (New York/London)

115.6

151.3 141.4 138.9 (1.8)

Coffee (Brazil/New York) 29.4 30.5 31.6 29.4 (7.0) Tea (London) 102.6 117.8 111.9 117.1 4.6 Total 51.8 60.3 69.7 69.1 (0.9) Agricultural Raw Materials

Cotton (Liverpool) 44.2 49.8 56.2 62.1 10.5 Rubber (Malaysia) 53.1 56.9 52.2 65.8 26.1 Wool (Australia) 77.8 82.9 98.4 94.6 (3.9) Total 74.2 74.5 80.7 82.6 2.4 Metals Crude oil (average price) 142.4 164.5 162.1 176.2 7.8 Copper (London) 56.3 50.4 54.3 56.5 4.1 Tin (London) 69.4 63.9 68.2 74.1 8.7 Lead (London) 69.9 66.8 70.1 72.3 3.1 Zinc (London) 74.6 73.3 77.0 76.6 (0.5) Gold (London) 83.6 83.1 86.4 88.7 2.7 Total 73.8 70.2 73.2 75.3 2.9 Commodity Price Index** 74.3 78.1 79.7 80.5 1.0

Source: IFS, June 2003. * 1995=100. **Excluding energy prices.

- 117 -

7/2 : Monetary Developments

7/2/1: Discount and Interest Rates Discount rates (or the like) declined during Jan./March 2003 in the euro area, and the UK. In the meantime, the discount rate rose in Canada, and remained stable in both the USA and Japan. The euro repo rate was reduced on 6 March 2003 by ¼% to reach 2.5%; recording its lowest level over the last three years .The reduction was mainly for the purpose of improving the sluggish economic performance of the euro area, especially under the remarkable appreciation of the euro vis-à-vis the US dollar. The pound sterling base lending rate was also cut, on 6 Feb.2003, by ¼% to reach 3.75% (the lowest rate since 1955). This reduction was chiefly for alleviating the expected decline in the local and external demands for the British products and its adverse impact on the performance of the British economy. The Central Bank of Canada decided, on 4 March 2003, to raise the discount rate by ¼% to reach 3.25%. This was accompanied by a rise in overnight lending rate by ¼% to reach 3.0% (the highest record since Oct. 2001). The interest rates on the Canadian dollar were raised to mitigate the marked increase in the inflation rate, mainly stemming from the hike in energy prices. In the meantime, the discount rates of the US dollar remained unchanged at 0.75%, and the Japanese yen at 0.10%.

Discount Rates

(% Annually) 2002 2003 At End of

June Sept. Dec. March USA 1.25 1.25 0.75 0.75 Canada 2.75 3.00 3.00 3.25 Japan 0.10 0.10 0.10 0.10 UK* 4.00 4.00 4.00 3.75 Euro Area** 3.25 3.25 2.75 2.50

Source: Financial Times, various issues & IFS, June 2003. * Base lending rate. ** Repo rate.

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Interest Rates on Loans and Deposits (% Annually)

Deposits Loans 2002 2003 2002 2003

June Sept. Dec. March June Sept. Dec. March USA 1.81 1.76 1.34 1.23 4.75 4.75 4.25 4.25 Canada 2.77 2.89 2.82 3.28 4.25 4.50 4.50 4.75 Japan 0.05 0.04 0.04 0.04 1.87 1.87 1.83 1.83 Germany 2.70 2.65 2.37 2.06 9.76 9.78 9.69 9.58 France 3.00 3.00 3.00 3.00 6.60 6.60 6.60 6.60 Italy 1.47. 1.44 1.30 1.11 5.79 5.76 5.66 5.31 UK Unavailable Unavailable Unavailable Unavailable 4.00 4.00 4.00 3.75 Euro Area 2.93 2.77 2.51 2.20 6.17 6.11 5.97 5.76

Source: IFS, April, June 2003. 7/2/2: Exchange Rates

Exchange rate developments, during the period Jan./March 2003, indicate a depreciation of the US dollar against the euro, the Canadian dollar, and SDRs. However, the US dollar notably appreciated against the pound sterling and the Japanese yen. As such, the euro rose against the US dollar from 0.9536 a dollar at the end of Dec. 2002 to 0.9179 at the end of March 2003, and the Canadian dollar from 1.5796 a dollar to 1.4693. Moreover, the US dollar appreciated against the pound sterling from 0.6204 per dollar at the end of Dec. 2002 to 0.6330 at the end of March 2003, and the Japanese yen from 119.9 a dollar to 120.15. Accordingly, SDRs scaled up against the US dollar from 0.7356 a dollar at the end of Dec. 2002 to 0.7279 at the end of March 2003.

The depreciation of the US dollar against the euro, the Canadian dollar, and the SDRs during Jan./March 2003 was a main reflection of the tension in the Middle East and the associated uncertainty worldwide. Accordingly, a fall was seen in the capital flows to the USA, and in the attractiveness of the US financial assets for foreign investors who preferred not to invest in high risk assets. This led to widening the BOP current account deficit of the United States. Another

- 119 - important factor behind the depreciation of the US dollar against the euro was the rise in the interest rates in the euro area compared with their counterparts in the USA.

The US dollar appreciated against the pound sterling due to the reduction, made by the Bank of England, in the base lending rate by ¼% during Jan./March 2003. Other influencing factors were the release of unfavourable indicators reflecting the weak performance of the British economy, and the decision of the British government to take part in the war on Iraq. The appreciation of the US dollar against the Japanese yen was because of the intervention of the Bank of Japan in the foreign exchange markets to keep the yen exchange rate low to enhance the competitiveness of the Japanese exports. In addition, capital outflows from Japan increased to benefit from the higher interest rates of some major currencies relative to the yen.

Exchange Rates of Main Currencies against the US Dollar

(Units of Currencies per US Dollar)

2002 2003 Change Rate% June Sept. Dec. March Jan./March2003

Canadian dollar 1.5187 1.5858 1.5796 1.4693 (6.98) Pound sterling 0.7122 0.6395 0.6204 0.6330 2.03 Japanese yen 124.0500 121.5500 119.9000 120.1500 0.21 Euro 1.1793 1.0142 0.9536 0.9179 (3.74) SDRs 0.8028 0.7560 0.7356 0.7279 (1.05) Source: IFS, March & May 2003. 7/2/3: International Reserves

Total international reserves (excluding gold) amounted to SDR 1898.9 billion at the end of March 2003, recording a rise of SDR 51.5 billion or 2.8% during the period Jan./March 2003. Around 92.4% of this rise was concentrated in the reserves of developing countries, which surged by SDR 47.6 billion or 4.2% to reach SDR 1172.4 billion, or 61.7% of total international reserves at the end of March 2003. More than half of the increase in the international reserves of the

- 120 - developing countries was in the Asian reserves that moved up by SDR 25.0 billion or 3.5%. The reserves of the industrial countries slightly increased by SDR 4.0 billion or 0.6% during January/March 2003, to reach SDR 726.5 billion at the end of the period under review. The bulk of the rise came from the US$ 16.0 billion surge in Japan’s reserves. However, the reserves of the euro area shrank by US$ 9.7 billion, Canada by US$ 1.2 billion, and the UK by US$ 1.1 billion.

International Reserves (Excl. Gold)

(SDR) 2002 2003 Change%

At End of June Sept. Dec. March

Jan./March 2003

The World 1755.5 1822.3 1847.3 1898.9 2.8 Industrial Countries 701.8 727.1 722.5 726.5 0.6 USA 47.8 49.0 50.0 50.2 0.4 Canada 27.7 27.5 27.2 26.0 (4.4) Germany 38.4 39.3 37.6 38.4 2.1 France 22.3 22.6 20.9 20.0 (4.3) Italy 18.4 20.2 21.0 23.7 12.9 Japan 329.5 342.3 339.2 355.2 4.7 UK 30.5 30.8 29.0 27.9 (3.8) Euro Area 179.0 185.5 181.3 171.6 (5.4) Developing Countries 1053.7 1095.2 1124.8 1172.4 4.2 Africa 50.9 53.6 53.4 55.7 4.3 Asia 663.7 694.8 717.3 742.3 3.5 Europe 123.1 133.3 138.0 148.3 7.5 Middle East 96.4 95.9 97.8 100.7 3.0 Latin America &Caribbean 119.6 117.6 118.3 125.4 6.0

xporting E–OilountriesC

107.2 107.8 108.6 113.0 4.1

orting xpEil O-NonountriesC

946.5

987.4

1016.2

1059.4

4.3

Source: IFS, March & June 2003.

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

Several international and regional meetings were held during the period Jan./March 2003, the most salient of which were the following: OPEC Meeting

The OPEC held its extraordinary meeting in Vienna on 12 Jan. 2003 to discuss the necessary means to achieve stability in the international oil markets and avoid the adverse effect of the rise in prices on the global economy. It is to be noted that the crude oil price exceeded the level pre-determined by the OPEC of US$ 28 to reach almost US$ 30 a barrel. This was because of the tension prevailing in the Middle East, and the deterioration in oil production in Venezuela because of strikes in the oil sector. In response, the OPEC decided to raise its oil production ceiling to reach 24.5 million b/d, and declared that it is a temporary move until both Venezuela and Iraq restore their stability and former production levels (2.9 million b/d in Venezuela in Nov. 2002, and 2.3 million b/d in Iraq in Dec. 2002). The OPEC pointed out that halting the flow of Iraqi oil will lead other member states to recourse to oil reserves estimated at some 1.8 million b/d, and the major consuming countries to draw on their strategic reserves until the world restores production to its former levels. G-7 Meeting

The G-7 finance ministers and central banks’ governors, in addition to Russia, held their meeting in Paris on 22 Feb. 2003. In the meeting, they expressed their countries’ willingness to continue to cooperate closely with each other, and to undertake the appropriate measures to face the continuous slowdown in the global economic performance, as their economies are still resilient under the uncertainty prevailing worldwide. The most prominent issues tackled in their Communiqué are the following :

- 122 - - The commitment of the European countries to push production increase, reform

capital markets, raise employment opportunities, and add more flexibility to the economy.

- The extension of the April 2002 action plan on financial crisis prevention and resolution, the pledge of the United States to implement a set of measures to increase investment and raise productivity growth, the commitment of Japan to continue its structural reforms, especially in the financial and corporate sectors.

- Urging the IMF to enhance its efforts to prevent and curtail crisis, by rendering its surveillance more effective.

- The readiness of the group to give substantial help to African countries that implement New Partnership for Africa’s Development principles, especially the commitment to improving governance and following sound policies.

The Eighth Summit of the COMESA Authority of Heads of State and Governments

The COMESA summit was held on 17 March 2003 in Khartoum, with the Sudan as a chairman and Uganda as a vice-chairman. The summit highlighted some of the decisions that are of cardinal importance to the integration process in the COMESA region. The following are the decisions: - All member states are urged to comply with the decisions of the COMESA

members to ensure the proper functioning of the Free Trade Area (FTA). They also extended derogation to both Namibia and Swaziland for a further period to become enrolled in the COMESA Free Trade Area. They also urged all member states to comply with the decision of the Council of Ministers on the use of the Simplified Certificate of Origin for small-scale traders.

- All member states are urged to ensure that all preliminary work necessary for taking the decision to establish a customs union (at the end of 2004) with a common tariff for external trade, be completed by the next meeting of the COMESA Council of Ministers.

- All member states are asked to encourage stakeholders in their countries to actively participate in the national consultations to ensure that the views of both public and private sectors are incorporated in the draft of the Investment Framework Agreement. Moreover, the Authority urged the member states to

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establish the COMESA Common Investment Area (CCIA), after the remarkable increase in the foreign direct investment (FDI) inflows to Sub-Saharan Africa from US$ 5.8 billion in 2000 to US$ 11.8 billion in 2001. However, FDI inflows in COMESA dropped from US$ 3.8 billion to US$ 3 billion during the same period, reflecting a significant decline in investment flows to Egypt and Mauritius, which are the major investment destinations in the COMESA region.

- The member states are urged to sign the COMESA Fund Protocol as soon as possible. This Fund consists of the COMESA Infrastructure Fund for regional long-term economic projects, and an adjustment facility for short-term economic reforms to meet the costs incurred by the participants in the Regional Indicative Program. Twelve member states signed the Protocol, except Madagascar that signed the Protocol during the Summit.

- The members recommended the organization of a regional donor conference to address the food security concerns of the COMESA region within the framework of the program of the New Partnership for African Development (NEPAD). The member states were urged to inform national civil societies of the advantages of participating to ensure broad ownership; and ascertaining that priority should be given to the NEPAD Comprehensive Africa Agriculture Development Program.

- Members were asked to pay more attention to infrastructure developments, and the liberalization of air transport services. They were also urged to participate in the COMTEL project, and to adopt the Model Policy Guidelines in formulating national policies in the Information and Communication Technology (ICT).

- Members were asked to cooperate with other regional organizations, including the East African Community (EAC), the Southern Africa Development Community (SADC), the Indian Ocean Commission (IOC), the development partners (including France and India), and the United States of America Agency for International Development (USAID).

- The Eastern African countries, which are also members in the ACP group, were urged to agree on regional negotiation strategies and mechanisms, concerning the related issues of multilateral trade. The Authority calls on issuing a declaration expressing their disappointment with the status of the negotiations of the World Trade Organization (WTO) whose effect is to sideline their developmental efforts. Moreover, the Authority directed COMESA Ministers responsible for adopting a common position on the issues that will be on the agenda of the 5th Ministerial meeting, decided to be held in Cancun, Mexico.

- 124 - - The members were notified of the Protocol on Free Movement of Persons,

Labor, and Services, the Right of Establishment and Residence approved by the Authority in May 2001 in Cairo, and requesting the Secretariat to review progress in implementing the Free Movement Program. In addition, member states that have not completed national consultations on signature of the Protocol of Free Movement should do so in preparation for the 2004 Summit.

- The member states were urged to honour their commitments to COMESA. EU Summit

The EU leaders convened on 20 and 21 March 2003 in Brussels, Belgium, to review the issues related to the EU within the framework of the Lisbon strategy to make the EU the most competitive economy in the world, capable of a sustainable economic growth with more jobs and greater social cohesion. During the summit, leaders agreed on the following points: - To increase the potential for growth of the European economies, through

effective macroeconomic policies and purposeful structural reforms; and to follow the measures that contribute to achieving the Lisbon goals within the framework of a ten-year program of reforms in labor, capital and product markets.

- To reaffirm their commitment to the Lisbon agenda, now entering its fourth year since March 2000, especially to the three main pillars of the Lisbon strategy: the economic, the social and the environmental.

- To support the sustainable growth and identify the following priorities: taking decisive actions to increase employment, giving priority to modernization, innovation and entrepreneurship, boosting research in the industrial sector, and improving the regulatory frameworks without adversely affecting the environment. To take these priorities forward, the European council set the directives for the Broad Economic Policy guidelines and revised the European Employment Strategy prior to its adoption in June 2003.

- To set deadlines for the completion of the remaining Lisbon reforms in key areas: energy markets, railways, financial markets, and cross-border social security rules before next year’s spring meeting of the European Council.

- 125 - -To ensure the internal market integration and extension, and encourage

investment in information as the best guarantee for innovation and modernization, as well as providing a skilled labor force.

- To invite member states to develop initiatives to foster entrepreneurship more actively through the education system and to promote the value of entrepreneurship and to ask the Commission to set an action plan for the follow up of the progress in the initiative before 2004. Member states were urged to speed up the implementation of the European charter for small enterprises to ensure a more effective involvement of small businesses in the policy- making process.

- To speed up the implementation of infrastructure projects in energy, transport, and telecommunications, along with the broad band/high speed internet strategy by 2005. The member states were urged to remove the technical and legal barriers, and to exchange experiences with each other.

- To cooperate in the field of basic skills, languages, and training systems, studying the methods of developing education, and calling for the implementation of the ten-year education program for developing human resources, through using the best practices which would have a positive effect on economic growth.

- To increase spending on research and development to reach the target ratio of 3% of GDP of EU countries, and to set a mechanism by which benefits can be achieved from developments in research as well as generalizing their effectiveness and efficiency.

Annexes

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Annex (A) Decisions Regarding the Monetary Policy and the Regulation

of the Banking Activity during the Period January/March 2002/2003

First: The Monetary Policy

The CBE Board of Directors decided on the first of March 2003 to exclude

the balances of the treasury bills, with the remaining period of their maturity not exceeding 15 days, from the numerator of the requirement ratio. The ratio, however, shall remain at its current level of 14%. This decision shall be applied on the ratio numerator data of the period starting from March 3, 2003.

Second: The Banking Activity Regulatory Controls for Combating Money Laundering

The CBE issued Decision No. 209 on January 29, 2003, approving the

regulatory controls that banks, exchange dealer companies and money transmission companies have to abide by to combat money laundering. This is in accordance with the following: 1) Regulatory Controls for Banks:

The following controls shall replace the ones reported to banks on 21 June 2001, concerning opening accounts and performing banking transactions.

First: Opening Accounts

Banks shall set the systems necessary for obtaining and verifying

information related to the identification and legal standing of their customers and beneficial owners, whether natural or legal. Such systems shall meet the

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requirements of the principle “Know Your Customer”, when opening accounts for any customer. This is to be achieved through means of official identification, and recording of such data. Particular attention shall be paid to the following: 1) Banks shall not open accounts for anonymous persons or persons using false or

fictitious names. 2) When opening accounts banks shall use standard forms in all their branches.

These forms are to be duly filled and signed by customers; and the bank shall verify and endorse the acquired information in accordance with the original documents presented.

3) Opening account application forms shall include detailed information about the applicant, including his/her full name, nationality, permanent residential address, telephone number, business address, type of business activity; and names of proxies authorized to administer the customers’ account, their nationality and any other information deemed necessary by the bank.

In the case of legal persons, the application form shall include the following

additional information : • The legal form and nature of activity. • The proxy authorized to sign for the legal person. • Names and addresses of the partners, in case of partnerships. • Names and addresses of shareholders who own more than 10% of the

company’s capital, in case of a shareholder company. 4) Application forms shall include the applicant’s acknowledgement that he is the

original owner and the sole beneficiary of the account, and that he shall not deposit, in person, funds of anonymous or suspected sources, in addition to a pledge to update the relevant information.

5) The employee in charge shall have sight of the original documents, obtain a

copy of each, sign to the effect that each is identical to the original copy and verify the information therein as follows :

- 129 -

A- For Natural Persons • The official identification document (national number card- identity card-

passport- military card). • For incapacitated persons -such as minors- the documents establishing the

identity of their proxies for administering such accounts. • The necessary information and authorization documents for the persons

acting on behalf of the customer.

B - For Legal Persons • Documents necessary for verifying the existence of the legal person and the

existence of the business, especially the commercial register and the tax card.

• Documents proving the existence of an authorization from the legal person to the natural person(s) representing it, along with all relevant information thereabout.

• For non-profit organizations, such documents proving their foundation and the nature of their activities that entitles them to open such accounts.

In cases of indirect applications for opening an account, application forms for

opening the account shall be authenticated.

6) If a financial institution (local or foreign) applies for opening an account with the bank, it is imperative that sufficient relevant information shall be obtained, taking into consideration the following: • Ensuring that the information includes what is necessary for the

identification of the financial institution. • Ensuring that the financial institution is subject to a regulatory authority in

its motherland. • Ensuring the existence of anti-money laundering laws in the motherland of

the financial institution. 7) Banks shall establish the systems and procedures necessary for accepting

customers, with particular attention to the customers mentioned below. This shall be implemented in accordance with the data and information available to the bank at the time of carrying out transactions or rendering services for these

- 130 -

customers. The bank shall determine the appropriate managerial level to deal with them. These customers include: • Customers who belong to countries where anti-money laundering

legislations are lacking, as reported to the bank by the Central Bank of Egypt.

• Customers that are commonly engaged in businesses related with valuable commodities, such as jewels, gold, cars, antiques, or dealings in real estate, lease financing, and gambling clubs.

• Customers who travel frequently to countries known for the cultivation of and trafficking in narcotics.

• Customers who tend to invest in such unusually high-risk investments, that their behavior may seem to be not normal for an average investor.

8) Banks shall have to periodically update information and documents presented

for opening a customer’s account, at most once every three years, or whenever justifying grounds appear.

Second: Conducting Banking Transactions

Customers’ accounts are originally intended to satisfy their needs, be they

natural or legal persons, according to the nature of their respective business and special interests. Consequently, it is necessary for banks to obtain adequate information when dealing with such accounts to meet the requirements of the “Know Your Customer” principle, while being committed to refrain from accepting funds or deposits from anonymous sources or under false or fictitious names. Therefore, particular attention shall be paid to the following transactions: (1) Cash Deposits

A- The following shall be considered cash deposits:

• Travelers’ checks deposited in customers’ accounts. • Bank bearer checks deposited in customers’ accounts.

B- When accepting cash deposits, banks shall pay attention to the following:

- 131-

• Depositing shall be made according to a form showing the following basic data (name of the person into the account thereof the cash is deposited, the amount deposited, the account number, name of the depositor and his address).

• Verifying the data recorded in the form, and reviewing the documents establishing the identity of the depositor.

C- Due diligence shall be given to the following deposits:

• Large cash deposits made by account holders, personally or through their proxies, whenever they are inconsistent with the nature of their activity.

• Frequent cash deposits whose total, over a specific period, is inconsistent with the activity of the customer.

• Frequent cash deposits by different entities into a customer’s account for no clear purpose, and with no apparent relation between such entities and the customer.

• Large cash deposits transferred within short periods of time to another entity not closely related to the activities of the customers making such transfers.

• Large cash deposits by customers who usually use checks or other banking instruments.

• Large cash deposits carried out by customers through automated teller machines, and as such making no direct contact with the bank staff, if such deposits are inconsistent with the activity of the customer.

• Customers on whose accounts large cash transactions are conducted without using other banking instruments for no clear reason.

• Customers who have several accounts for cash deposits, whose total over a specific period, is large.

• Persons seeking to exchange large amounts of cash of small denominations for large denominations, for no clear reason.

(2) Transactions on Customers’ Accounts

Due diligence shall be paid to the following:

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• Customers who transfer large amounts abroad with instructions to pay in cash, and large amounts transferred from abroad to non-resident customers with instructions to pay in cash.

• Large amounts of transfers from abroad by banks or financial institutions to a customer, inconsistent with the nature and volume of his activity with the outside world.

• Large amounts of transfers from abroad with instructions to pay in cash to beneficiaries having no accounts at the bank.

• Transfers from and to countries having no adequate anti-money laundering legislative systems.

• Successive transfers to account(s) opened abroad. • Check deposits of high value, whose beneficiary is a third party and

endorsed in favor of the customer with, no clear relation between the customer and the beneficiary necessitating that.

• Customers holding several accounts inconsistent with the nature of their activity, especially if transactions on these accounts are conducted with persons having no clear relation with them.

• Customers using their accounts to receive or transfer large sums, for no clear reason, or that have no relation with them or their activity.

• Large withdrawals from a then dormant account, or from an account that received unexpectedly large transfers from abroad.

• Frequent small electronic transfers to an account, followed by a withdrawal of these sums, or transferring them to another account inside the country or abroad.

• Frequent requests for travelers’ checks or bearer banks’ checks in sums inconsistent with the nature of activity of the customer.

• Frequent reception of bills for collection to be paid abroad, inconsistent with the nature and volume of activity of the customer.

• Opening documentary credit in large sums that are inconsistent with the nature and volume of activity of the customer, or where the beneficiary is a customer closely related to the customer abroad.

• Discounting commercial papers, the beneficiary of which is a foreign party unknown to the bank, without any justification for discounting them locally.

- 133 - (3) Foreign Exchange Selling and Purchasing Transactions

Banks shall give due diligence to selling and purchasing of foreign

currencies, taking into consideration the following with respect to any transactions exceeding US$ 5000 or their equivalent:

• Banks shall not deal with anonymous persons or those with false or

fictitious names. • Banks shall obtain information on customers on standard forms at all

branches, for purposes of purchasing and selling foreign currencies. Customers shall fill in and sign such forms, and the bank shall verify and endorse the information therein.

• Forms of selling and purchasing shall include detailed information on the full name of the customer, nationality, permanent residence address, telephone number, business address, type of activity and any information the bank deems necessary.

• Special care shall be given to the following transactions:

- Large purchasing and selling transactions, inconsistent with the nature of the customers’ type of activity.

- Frequent purchasing and selling transactions whose sum total, within a certain period, is inconsistent with the customers’ type of activity.

(4) Other Transactions

Banks shall be particularly careful, with other transactions especially the following:

• The purchase of securities in large sums through the bank, or

keeping them as a trust, if this is inconsistent with the nature of the activity of the customer.

• The request for credit by customers against assets owned by others having no apparent relation with each other, or when the volume of

- 134 -

the credit requested is inconsistent with the nature of the activity of the said customers.

• Transactions of persons frequenting gaming-table casinos, through representatives of the banks that supervise such casinos.

(5) Unusual Banking Transactions Banks shall establish detailed criteria necessary for detecting any unusual

transaction, taking into consideration, as a minimum requirement, what is provided by these regulations about the said transactions. This should be accomplished in a way that enables the internal system of the bank to detect suspicious transactions and report them to the manager responsible for combating money laundering transaction. Particular attention shall be accorded to cash transactions exceeding LE 250.000 or their equivalent in foreign currencies. Third: Reporting Transactions Suspected of Involving

Money Laundering

1) Each bank shall assign an official from the senior management, for reporting to the Money Laundering Combating Unit (MLCU) in the CBE, on transactions suspected of involving money laundering. It shall also assign a substitute to act on the behalf of the said official during his absence. The MLCU shall be notified if either of them is replaced.

2) The manager responsible for combating money laundering shall examine all unusual transactions whether reported to him directly by the internal system, or by one of the bank staff or by any other entity and appended by justifications for the reasons of suspicion.

3) If this manager finds out that suspicions about such transactions are groundless, he shall be responsible for deciding to file such reports and for explaining his reasons for this decision.

4) If the manager suspects that such transactions involve money laundering, he shall report them to the money Laundering Combating Unit on the

- 135 -

form prepared by the Unit for this purpose, along with all the relevant data and copies of the documents.

5) Reports shall contain detailed reasons and grounds for the bank’s decision that the transaction involves money laundering.

6) Banks shall not disclose to customers, beneficiaries, or any other entities except the authorities and entities entitled to enforce the Anti-Money Laundering Law, any information, regarding the reporting procedures of the financial transactions suspected of involving money laundering.

Fourth: Retention of Documents and Records

Banks shall retain documents and records they are committed to maintain for

a period of not less than five years as follows: • For accounts opened for natural or legal persons, or other banks or financial

institutions, documents and records related to such accounts shall be retained for a period of not less than five years from the date of closing the account.

• For transactions conducted for customers not holding accounts, documents and records for any transaction shall be retained for a period of not less than five years from the date of completing the transaction.

Banks shall have to periodically update this data, and make it accessible for

judicial authorities and entities concerned with the enforcement of the Anti-Money Laundering Law No. 80 for 2002, whenever requested.

Fifth: Training

Banks shall prepare and conduct continuous training programs for their staff, with the aim of enhancing their efficiency in complying precisely with these regulations. It is important that such programs should include methods of money laundering and how to detect and report them, and how to deal with suspected customers. Banks shall keep the records of all training programs that have been implemented for a period of not less than five years. Such records shall contain names of the trainees, their qualifications, and the training entity, at home or abroad.

- 136 -

Sixth: Internal Systems

Banks shall establish adequate internal systems appropriate for sound application of these regulations, as well as conduct periodic reviews to detect any weaknesses in them or in their level of compliance with the regulations, and take the necessary corrective measures. Special care should be given to the following:

− The ability of these systems to detect transactions inconsistent with the volume and nature of the customer’s activity, or those conducted with suspected customers.

− The manager in charge is to be notified of any unusual transaction, whose value exceeds the limits set and determined by the management, particularly in cash deposits and withdrawals, in selling or purchasing currencies in cash, and in transfers from and to abroad.

2– Regulatory Controls for Exchange Dealer Companies: First: Foreign Exchange Purchasing and Selling Transactions

Exchange dealer companies shall establish the systems necessary to obtain and verify, through legal means of identification, the information required for the identification of their customers, in compliance with the requirements of “Know Your Customer” principle. In case any transactions amounts to or exceeds US$ 5000 or the equivalent thereof, the identification information of these customers shall be recorded, with particular attention to the following: 1- Exchange dealer companies shall not deal with anonymous persons or persons

using false or fictitious names. 2- Customer’s information shall be obtained on standard forms designed for

selling or purchasing currencies. Customers shall fill in and sign these forms; and the exchange dealer companies shall verify the information included in these forms.

- 137 - 3- The forms designed for selling or purchasing foreign currencies shall include

detailed information on the customer’s full name, nationality, permanent residential address, type of business activity and the number of his identity card.

4- The official in charge shall review and obtain a copy of the original identity

document (national number card- identity card- passport- military card), and sign to the effect that it is an examined copy.

5- Particular attention shall be paid to the following customers, according to the

data and information made available for the company at the time of transacting with them:

- Customers belonging to countries that have no adequate anti-money

laundering legislative systems, as reported to the company by the Central Bank of Egypt.

- Customers engaged in businesses commonly related with valuable commodities, such as jewels, gold, cars, antiques, or dealing in real estate and lease financing.

- Large purchasing and selling transactions inconsistent with the nature of the customers’ activity.

- Frequent purchasing and selling transactions whose total sum, within a certain period, is inconsistent with the nature of the customers’ activity.

Second: Reporting Transactions Suspected of Involving Money Laundering

1- The managing director of each respective company- or the substitute

thereof in his absence- shall report to the Money Laundering Combating Unit (MLCU) at the CBE, any transaction suspected of involving money laundering. In case this director or his substitute is replaced, MLCU shall be informed.

2- The managing director shall examine all unusual transactions whether

reported to him directly through the company’s internal systems, or by

- 138 -

one of its staff, or any other entity; and the justifying grounds for suspicion shall be stated in this report.

3- If the managing director finds out that suspicions about such transactions are groundless, he shall be responsible for deciding to file such reports and explaining his reasons for this decision.

4- If the managing director suspects that such transactions involve money

laundering, he shall report them to the MLCU on the form prepared for this purpose by the Unit, and shall attach all the relevant data and copies of the documents.

5- Reports shall contain the detailed reasons and grounds for the

company’s decision that the transaction involves money laundering.

6- Companies shall not disclose to their customers or to any parties other than the authorities and entities concerned with the enforcement of the Anti-Money Laundering Law, any information on any of the reporting procedures taken regarding the purchasing or selling transactions suspected of involving money laundering.

Third: Retention of Documents and

Records Exchange dealer companies shall retain the documents and records they are committed to maintain for a period of not less than five years from the date of completing the transactions. The companies shall also have to periodically update these documents and records. Judicial authorities and entities concerned with the enforcement of the Anti-Money Laundering Law shall have the right to access to these documents and records when requested. Each company shall have an automated system for purchasing and selling foreign exchange, and all systems necessary for establishing an effective link between the companies and the Foreign Exchange Statistics Chamber at the CBE.

- 139 -

Fourth: Training Companies shall prepare and conduct ongoing training programs for their staff- at least once a year - along with the programs organized by the CBE, especially for new employees, those responsible for the execution of purchasing or selling transactions and internal auditors. The aim of such programs is to enhance the efficiency of the staff in complying precisely with these regulations. Attention should be given that such programs cover means of money laundering and methods of detecting and reporting them, as well as ways of dealing with suspected customers. Companies shall keep records of all the training programs that have been implemented, for a period of not less than five years. Such records shall contain names of the trainees, their qualifications and the training entity, at home or abroad. Fifth: Internal Systems

The company shall establish the appropriate internal systems required for the

sound application of the anti-money laundering regulations and shall review them periodically, so as to detect any weaknesses in these systems, or in the level of compliance, and shall take the necessary corrective measures forthwith. 3- Regulatory Controls for Money Transmission Companies :

First: Receiving and Executing Money Transfer Orders

Money transmission companies shall establish systems for obtaining and verifying information on the identification of their customers and beneficial owners, whether natural or legal persons. This aims at meeting the requirements of “Know your Customer” principle when executing transfer orders for any customer. This is to be done through legal means of verification and recording of the identification information. Particular care shall be given to the following :

- 140 - 1- Transfer orders from anonymous persons, or under fictitious or false names

are not to be accepted. 2- Transfer orders shall be made on a form prepared by the company. It is to be

filled out and signed by the customer. The company shall then verify and endorse the data therein. In the case of receiving transfer orders through other means such as fax or internet, necessary procedures must be taken to verify the referred-to orders and ensure that they meet the legal requirements.

3- The transfer form shall include detailed information about the full name of transfer applicant, his nationality, permanent address, telephone no., work address, type of activity and other information deemed necessary for the company. The same type of information shall be acquired about persons or entities to which money is transferred. The same information is to be obtained also from the beneficial owners of the transactions if recognized. The applicant must present an acknowledgement that the sums to be transferred are not gained from unknown or suspicious sources.

4- The official in charge shall request sight of the original identification documents of the applicant (national number card, ID card, passport, military card) and obtain a copy of such documents. He is to testify, in writing, that the copies of the documents are identical to the original.

5- As for inward transfers, data should be kept about the sum of the transfer, the beneficiary (name, permanent address and type of activity) and also the transferor, be it a person or an entity.

6- Companies shall give due regard to unusual transfers from/to abroad and record them in the books made specifically for this purpose, while paying particular attention for the following:

• Large transfers carried out to the order of or for a customer, which are

inconsistent with the nature of the customer’s activity. • Frequent transfers whose total over certain periods is inconsistent with the

nature of the customer’s activity. • Transfers in which one of its parties (whether a person or an entity) is

located in a country that do not have proper legislative systems for combating money laundering, or for whatever the company is notified of.

- 141 - Second: Reporting Transactions Suspected of Involving Money Laundering

1- Each company or its agent shall specify an official -and a substitute in case

the former is absent- responsible for reporting any transactions suspected of involving money laundering to the Money Laundering Combating Unit at the CBE. The Unit shall be notified in case of any replacement of the said persons.

2- The manager in charge of combating money laundering shall check the information on any unusual transfers made available to him via the company’s internal systems or delivered by any employee in the company or any other entity. Justifiable reasons for suspicions shall be appended.

3- Should the manager in charge of combating money laundering find no suspicions in what he has checked, he shall be responsible for taking the decision on filing these transactions, stating the reasons for such a decision.

4- Should the manager in charge of combating money laundering suspects that such transactions involve money laundering, he shall report the incident to the Money Laundering Combating Unit, on the form prepared by the Unit for this purpose, with all data and copies of all relevant documents attached.

5- The notification must include the detailed reasons and grounds that made the company decide in its report, that such a transaction involves money laundering.

6- The company shall not disclose to the customer, beneficiary or authorities or entities other than those responsible for the enforcement of Anti-Money Laundering Law, any of the reporting procedures taken in relation to transfers suspected of involving money laundering, or of any relevant data.

Third: Retention of Documents and Records

The company shall keep the documents and records it is obliged to retain, for not less than five years from the date the transaction is completed. The company must also produce these documents and records, whenever needed, at the disposal of the judiciary authorities and the responsible entities for the enforcement of the Anti-Money Laundering Law. These documents and records shall be updated on a regular basis.

- 142 - Fourth: Training

The company must prepare and carry out regular training programs (at least once a year) for its employees. Special attention is to be given to new recruits, to those handling transfer transactions, and to internal auditors so as to develop the efficiency of the staff in complying with these regulations. The training programs shall cover methods of money laundering techniques, and ways of detecting and reporting them, as well as ways of dealing with the suspected customers. The company shall keep records of the training programs it has carried out for at least five years, together with the trainees names and qualifications, as well as with the training entity whether in Egypt or abroad.

Fifth: Internal Systems

The company shall establish adequate internal systems for a sound application of those controls and regulations specified for money laundering combating. These regulations shall be checked regularly by the company to detect any weaknesses therein, or in the compliance therewith, and take the necessary measures to rectify them. Merging Banks of Development and Agricultural Credit in Governorates

The CBE Board of Directors issued Decision No. 312, on 6th February 2003, approving the merger between banks of development and agricultural credit in governorates (17 banks), to become only 6 banks according to the final figures of banks’ balance sheets on 30th June 2002 approved by their general assemblies. (The figures were reviewed and approved by the CAPMAS).The resultant 6 banks are the banks for development and agricultural credit of Middle Delta, East Delta, West Delta, Greater Cairo and Fayyoum, North of Upper Egypt and South of Upper Egypt.

- 143 - Authorization of Public Sector Banks Applying for Dealing in the Primary Market of Government Bonds

The CBE Board of Directors issued Decision No. 500, on 6th March 2003, approving the authorization of public sector banks that applied for dealing in the primary market of government bonds as primary dealers; and authorizing the Governor to make exceptions in case these banks do not meet any of the requirements mentioned in the Board’s Decision No. 1610 for 2002, issued on 6th June 2002.

Rules Governing the Combination of the Board Chairmanship and Membership of Public Sector Banks and Board Membership of Investment Banks

The CBE Board of Directors issued on 20/3/2003 Decision No. 609 stipulating the rules governing the combination of the board chairmanship and membership of public sector banks and board membership of investment banks. These include the following:

1- Banks are forbidden to have board membership in more than one bank,

regardless of the statutes governing such banks. 2- As an exception from the aforementioned rule, the chairmen and members of the

boards of public sector banks may -exclusively- represent their banks in the membership of the board of directors of banks established under the provisions of investment laws, provided that such representation is confined to the board membership of one bank.

3- A board member in a bank – regardless of the statute governing the bank– may also be a member in the board of a joint-stock company, provided that it is not a trust company.

4- Simultaneous board membership in any number of joint-stock companies – including one bank – is allowed, provided that the member possesses at least 10% of the capital of each of these companies.

5- A board member in joint-stock companies where he/she possesses 10% or more of their capital is forbidden to have board membership in the companies where he/she does not possess the same ratio.

- 144 - 6- A board member in a bank established under the provisions of investment laws

is allowed to have board membership in any number of joint-stock companies established under the same laws.

7- A board member in the joint-stock companies -including one bank- established under the provisions of investment laws is forbidden to have board membership in other joint-stock companies established under other laws.

8- Civil servants of the government, public authorities, the public sector, and the public business sector may represent their entities or other entities as members in banks’ boards.

9- Representatives of public sector banks in the other banks in which they own a share are selected upon a Prime Minister decree, in conformity with the aforementioned regulations.

10-The board of a public sector bank shall appoint its representatives in the companies in which the bank is a shareholder. In case the representative is not one of the bank’s staff, appointment thereof shall be determined by a Prime Minister’s decree.

Credit Regulations

Seeking soundness of banks’ investments and compliance with credit regulations, the CBE - in the Circular issued on 26/2/2003 -stressed that banks:

1- shall not offer any foreign-currency facilities to customers; nor provide foreign

currency financing for any activity, unless they are assured that the customer has foreign-currency earnings that he pledges to use in repayment.

2- shall cease offering local-currency credit facilities guaranteed by foreign-currency letters of guarantee, be they issued by local banks or banks abroad. Local-currency credit facilities offered to foreign companies operating in Egypt, and guaranteed by letters of guarantee issued by banks abroad are excluded.

3- shall not offer local-currency facilities guaranteed by foreign-currency deposits (all types thereof), or by foreign-currency bonds. In case any of the stated rules is disobeyed, banks must inform the CBE.

- 145 -

Annex (B) 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 by Type (1/1/8) Bank Lending and Discount Balances to Business Sector Financial Sector

- Structure of the Egyptian Banking System as at 31/12/2002 - Authorized and Operating Exchange Dealer Companies up to 31/12/2002 - Mutual Funds Licensed and Operating up to 31/12/2002 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

- 146 -

Commercial Banks (1/3/1) Aggregate Financial Position (1/3/2) Deposits by Maturity (1/3/3) Non-Government Deposits & Saving Systems in Local Currency by

Maturity (1/3/4) Deposits by Sector (1/3/5) Deposits by Economic Activity (1/3/6) Lending and Discount Balances by Sector (1/3/7) Lending and Discount Balances by Economic Activity (1/3/8) Loans and Advances (Excluding Discount Balances) by Maturity and

Type of Guarantee Business and Investment Banks

(1/4/1) Aggregate Financial Position (1/4/2) Deposits by Maturity (1/4/3) Non-Government Deposits & Saving Systems in Local Currency by

Maturity (1/4/4) Deposits by Sector (1/4/5) Deposits by Economic Activity (1/4/6) Lending and Discount Balances by Sector (1/4/7) Lending and Discount Balances by Economic Activity (1/4/8) Loans and Advances (Excluding Discount Balances) by Maturity and

Type of Guarantee Specialized Banks

(1/5/1) Aggregate Financial Position (1/5/2) Deposits by Maturity (1/5/3) Deposits by Sector (1/5/4) Deposits by Economic Activity (1/5/5) Lending and Discount Balances by Sector (1/5/6) Lending and Discount Balances by Economic Activity

- 147 -

Interest Rate

(1/6) The Discount Rate and Interest Rates on Deposits and Loans in Egyptian

Pounds (1/7) Domestic Interest Rates on 3 Month Deposits in Major Currencies (1/8) The Interest Rates on Treasury Bills (Weekly Weighted Average) Index Number

(1/9) Wholesale Price Index (1/10) Consumer Price Index (Urban Population) (1/11) Consumer Price Index (Rural Population) 2- The Stock Exchange

(2/1) Companies Listed on the Stock Exchange (2/2) Bonds Issued on the Stock Exchange (2/3) Transactions in Shares on the Stock Exchange (2/4) Transactions in Bonds & Mutual Funds Documents on the Stock Exchange (2/5) Global Depository Receipts (GDR’s) (2/6) The Outstanding Balance of Treasury Bills (Quarterly) (2/7) The Outstanding Balance of Treasury Bills (Weekly) (2/8) The Outstanding Balance of Treasury Bonds 3- Public Finance & Domestic Public Debt

(3/1) Consolidated Fiscal Operations of the General Government (The Budget Sector, NIB & GASC and SIFs) (Total Expenditures and Net Lending) (3/2) Consolidated Fiscal Operations of the General Government

(The Budget Sector, NIB & GASC and SIFs) (Total Revenues and Grants)

- 148 -

(3/3) Summary of the Consolidated Fiscal Operations of General Government (The Budget Sector, NIB & GASC and SIFs)

(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 mn) (4/2) Balance of Payments (US$ mn) (4/3) Exports by Degree of Processing (4/4) Imports by Degree of Use (4/5) Regional Distribution of Exports and Imports Transactions (4/6) LE Exchange Rate against Foreign Currencies in the Free Market

(Transfers/Buying) (4/7) External Debt

5- Cotton

(5/1) Position of Egyptian Cotton (5/2) Egyptian Cotton Exports 6- Tourism

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

2003END OF March June March June March June March

Reserve Money 64921 65693 68464 70010 72053 73772 81826 Currency in circulation outside CBE 37027 37634 39836 40729 43846 45376 49560 Banks deposits in local currency 27894 28059 28628 29281 28207 28396 32266

Counterpart Assets 64921 65693 68464 70010 72053 73772 81826 Net Foreign Assets 13408 13624 11971 13002 12157 9816 9964 Foreign Assets 50315 51063 52761 53598 59943 61894 77529 Gold 1617 1761 1761 1879 1879 2568 2568 Foreign securities 11152 10870 10162 9866 13075 13621 16315 Foreign currency 37546 38432 40838 41853 44989 45705 58646 Foreign Liabilities 36907 37439 40790 40596 47786 52078 67565 Net Domestic Assets 51513 52069 56493 57008 59896 63956 71862 Net Claims on Government 51494 50334 68056 65062 73109 71325 74174 Claims; of which 78104 78356 100758 98303 118277 117532 132366 Government securities 32796 33158 81737 80336 80161 98512 95771 Deposits 26610 28022 32702 33241 45168 46207 58192 Net Claims on Banks 2466 1995 -10506 -10049 -18382 -17687 -33687 Claims 10798 10486 9935 10108 10123 10292 8639 banks' deposits in foreign currency 7332 8491 20441 20157 28505 27979 42326 Other Items (Net) -3447 -260 -1057 1995 5169 10318 31375 Assets 6849 6690 10233 9455 16598 18413 40362 Liabilities ;of which 10296 6950 11290 7460 11429 8095 8987 Equities 4687 4912 4912 5149 5149 5500 1500 Provisions 267 299 297 384 303 297 293Source : Central Bank of Egypt.

- 149 -

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

2000 2001 2002

2003END OF March June March June March June March

Domestic Liquidity 247464 255272 274172 284873 313858 328728 366561

Money Supply 48302 49738 51142 53448 56452 59805 63966

Currency in circulation outside the banking system 34519 35042 37097 38161 40704 42299 46099

Demand deposits in local currency 13783 14696 14045 15287 15748 17506 17867

Quasi-Money 199162 205534 223030 231425 257406 268923 302595

Time & saving deposits in local currency 153540 157602 164385 170681 183367 192718 204792

Demand, time & saving deposits in foreign currencies 45622 47932 58645 60744 74039 76205 97803

Counterpart Assets

Net foreign assets 23644 23393 20419 18957 19449 17285 19590

Domestic credit 285166 286639 316684 321870 352407 360090 389958

Other items (net) -61346 -54760 -62931 -55954 -57998 -48647 -42987

Source : Central Bank of Egypt.

- 150 -

( 1/1/2) Banking Survey : Domestic Liquidity and Counterpart Assets( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total Deposits in Local Currency 167323 172298 178430 185968 199115 210224 222659

Demand Deposits 13783 14696 14045 15287 15748 17506 17867

Public business sector * 1580 2506 1657 2556 1840 2813 1954

Private business sector 5581 5714 5548 6033 6644 7385 7434

Household sector 7169 7285 7447 7610 8050 8255 8920

Minus: purchased cheques & drafts 547 809 607 912 786 947 441

Time and Saving Deposits 153540 157602 164385 170681 183367 192718 204792

Public business sector * 11193 10305 11052 10258 11542 11116 11086

Private business sector 25794 25262 24019 23047 23421 24209 22654

Household sector 116553 122035 129314 137376 148404 157393 171052

Source : Central Bank of Egypt.

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

- 151 -

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

2000 2001 2002

2003END OF March June March June March June March

Total Deposits in Foreign Currencies 45622 47932 58645 60744 74039 76205 97803

Demand Deposits 5007 5070 6042 6742 8045 8267 11429

Public business sector * 229 250 298 236 316 311 544

Private business sector 2579 2421 3234 3936 4199 4155 5745

Household sector 2423 2528 2678 2753 3647 3992 5262

Minus: purchased cheques & drafts 224 129 168 183 117 191 122

Time and Saving Deposits 40615 42862 52603 54002 65994 67938 86374

Public business sector * 2054 2263 2215 2344 1885 1883 2342

Private business sector 10479 11282 14087 13629 15449 15272 18738

Household sector 28082 29317 36301 38029 48660 50783 65294

Source : Central Bank of Egypt.

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

- 152 -

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

2000 2001 2002

2003END OF March June March June March June March

Net Foreign Assets 23644 23393 20419 18957 19449 17285 19590

Foreign Assets 76432 77010 79201 78630 86963 90125 112383

Central Bank of Egypt 50315 51063 52762 53599 59943 61894 77529

Commercial banks 19073 18981 18655 18147 18081 19437 22812

Business & investment banks 7006 6932 7756 6798 8910 8736 11932

Specialized banks 38 34 28 86 29 58 110

Foreign Liabilities 52788 53617 58782 59673 67514 72840 92793

Central Bank of Egypt 36907 37439 40791 40596 47786 52078 67565

Commercial banks 11051 11398 13530 14972 15804 16555 20684

Business & investment banks 4110 4025 3545 3437 3173 3462 3673

Specialized banks 720 755 916 668 751 745 871

Source : Central Bank of Egypt.

- 153 -

( 1/1/5 ) Banking Survey : Foreign Assets and Liabilities( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Domestic Credit 285166 286639 316684 321870 352407 360090 389958

Net claims on the government (A+B+C-D) 65189 63060 83288 83322 92746 95423 107697

A-Treasury bills 24846 24996 28504 29015 35275 39739 52350

B-Securities 48165 48650 99602 100661 103644 122936 128810

C-Credit facilities 57423 57608 32104 31352 52058 33593 49968

D-Government deposits 65245 68194 76922 77706 98231 100845 123430

Claims on public business sector * 33301 32383 29463 29185 31380 31143 35445

Claims on private business sector 158234 162173 173980 178598 195423 200230 211302

Claims on household sector 28442 29023 29953 30765 32858 33294 35514

Other Items (Net) -61346 -54760 -62931 -55954 -57998 -48647 -42987

Capital accounts of which : -60628 -56414 -64980 -62530 -70157 -68579 -73383

Capital and reserves -25330 -25902 -26833 -27343 -28427 -29205 -26881

Provisions -28375 -27854 -30628 -31584 -35071 -36165 -39959

Net unclassified assets and liabilities -718 1654 2049 6576 12159 19932 30396

Source : Central Bank of Egypt.

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

- 154 -

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

2000 2001 2002

2003END OF March June March June March June March

Total Saving Vessels 246418 255211 277793 289118 320496 335651 376311

Savings with the Banking System 199162 205534 223030 231425 257406 268923 302595

Time & saving deposits in local currency 153540 157602 164385 170681 183367 192718 204792

Demand, times & saving deposits in foreign currencies 45622 47932 58645 60744 74039 76205 97803

Net Sales of Investment Certificates 37954 39007 42852 43966 47752 49008 53768

Post Office Saving Deposits 9302 10670 11911 13727 15338 17720 19948

Source : Central Bank of Egypt.

-155 -( LE mn )

(1/1/7) Total Saving by Type

2000 2001 2002

2003END OF March June March June March June March

Total 32988 32107 29185 28941 31100 30892 35345

In Local Currency 28536 27722 24888 24742 26062 25831 27492

Agriculture 14 65 60 388 309 399 13

Industry 15337 14583 14652 14664 15641 15539 16655

Trade 7507 7297 4476 4270 5276 4985 5684

Services 5678 5777 5700 5420 4836 4908 5140

In Foreign Currencies 4452 4385 4297 4199 5038 5061 7853

Agriculture 0 31 16 0 0 0 0

Industry 3859 3793 3933 3880 4581 4564 5371

Trade 570 553 329 319 323 327 422

Services 23 8 19 0 134 170 2060

Source : Central Bank of Egypt.

* Including all public 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 ) -156 -

2000 2001 2002

2003END OF March June March June March June March

Total 146569 150440 161812 164987 181300 185078 195359

In Local Currency 111846 115145 125420 128599 140830 144408 146220

Agriculture 4406 4512 4209 4344 4574 4659 4438

Industry 40931 43023 47244 48919 54731 55896 54748

Trade 35275 35622 38508 38527 41452 42266 43026

Services 31234 31988 35459 36809 40073 41587 44008

In Foreign Currencies 34723 35295 36392 36388 40470 40670 49140

Agriculture 489 494 514 554 559 549 678

Industry 14691 14893 15056 15234 14970 14969 18522

Trade 8055 8178 8082 7626 8889 8848 11310

Services 11488 11730 12740 12974 16052 16304 18630

Source : Central Bank of Egypt.

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

( LE mn ) - 157 -

2000 2001 2002

4Public Sector Banks

916BranchesCommercial Banks

24Private & Joint Venture Banks

380Branches

11Private & Joint Venture Banks

144Branches

20Off-Shore Banks

57Branches

Specialized Banks

1The Egyptian Industrial Development Bank

14Branches

1The Arab Egyptian Real Estate Bank**

27Branches

1 Principal Bank for Development & Agricultural Credit.

1034Branchesof which : Agricultural Banks in Governorate 17 Village Banks 850

257262Total

* Egyptian banks abroad are not included , also two banks established under private laws and are not 'registered with CBE : the Arab International Bank , and Nasser Social Bank. ** The Egyptian Real Estate Bank had been merged in the Arab Real Estate Bank in 21/6/1999 .

Real Estate

Industrial

Agricultural

- 158 -

STRUCTURE oF THE EGYPTIAN BANKING SYSTEM AS aT 31/3/2003*

Central Bank of Egypt

Business&Investment Banks

Main offices* Branches** Total of Paid up Capital (LE mn)

Total 104 130 197.8Cairo 33 27 97.3Alexandria 12 9 17.4Port-Said 10 11 11.2Suez 1 1 1.0Ismailia 0 0 0.0Behera 2 2 2.3Damietta 1 1 1.0Kafr El-Shiekh 0 4 0.0Gharbia 3 9 5.0Dakahalia 7 12 7.1Sharkia 4 14 4.1Menoufia 3 2 4.0Kalyoubia 3 1 3.0Bany- sweef 1 2 1.0Giza 18 13 34.0Fayium 0 2 0.0Menia 0 3 0.0Assiut 1 3 1.0Sohag 0 2 0.0Kena 1 4 1.0Asswan 0 1 0.0Marsa Matrouh 1 2 1.0North Sinai 1 1 1.0South Sinai 1 1 4.4Red Sea 1 3 1.0 Source : Central Bank of Egypt.

* Of which 11 companies were closed as a penalty & 20 companies are temporarily closed .

** Of which one branch hasen't started activity yet , 15 branches are closed as a penalty &

57 branches are temporarily closed .

Authorized and Operating Exchange Dealer Companies up to 31/3/2003

- 159 -

Total Distributions

31/3/2003

Distribution periodsat 31/3/2003at issue

LELELE mn

Open-Funds

0.00At maturity184.73100200Nov-95Growth1- Banque Du Caire

0.00Semi-annual82.92100300Apr-97Income / Growth

2- American Express Bank/First

0.00Semi-annual87.01100100May-97Income / Growth3- Egyptian Gulf Bank

20.00Semi-annual82.61100100Oct-96Income Export Development Bank of Egypt

Cairo F. Management

192.00Semi-annual274.51500100Aug-95Growth1- Arab Misr Insurance Group

50.00When profits

exceeds 25% of face value

610.54500100Jun-96Growth2- Societe Arabe Int'l de Banque/First

0.00Semi-annual97.21100200Oct-97Income / Growth

3- Societe Arabe Int'l de Banque/Second

32.00Quarterly102.2810050Feb-99Income4 - Societe Arabe Int'l de Banque/third

60.25Semi-annual89.62100300Oct-94Growth1- Egyptian American Bank

61.50Semi-annual98.32100200Nov-94Growth2- Bank of Alexandria59.05Quarterly73.09100500Feb-95Income1- Banque Misr/First

32.15when the value exceeds LE 93.346.0466.67300Sep-95Growth2- Banque

Misr/Second

0.00Semi-annual69.14100280Feb-98Growth3-Misr International Bank

70.00Semi-annual860.271000138.97Dec-97Income / Growth1- Misr Exterior Bank

10.00Cum. income & perio.distribution97.05100100Aug-98Income /

Growth2- Misr Iran Development Bank

405.13

cumulative & income

periodical distribution

1020.371000150Jun-99Income3- American Express Bank/Second

20.00Semi-annual204.15500100Dec-96Income / GrowthSuez Canal BankEgyptian Anglo

F. Management

0.00At maturity560.17500200Sep-94Growth1- National Bank of Egypt/First

73.50Quarterly54.64100300Oct-95Income2- National Bank of Egypt/Second

Closed-Funds

52.15Semi-annual107.5810050Jul-96Income / GrowthDelta for InvestmentHermes Fund

Management

0.00When the value reach LE 12001099.10100050Feb-97GrowthOrient Trust

Egyptian Investment

&Finance Co.

113.75 -1111.00100070Feb-00Income Direct Arab Real Estate Capex

source : Cairo & Alexandria Stock Exchanges.

El-Ahly F. Management

Fund managers

- 160 -

Prime Investment F. Management

Egyptian F.Management

Concord F. Management

Lazard Asset Management

Up To 31/3/2003 Mutual Funds Licensed and Operating

The Fund Capital

Fund Name

Hermes F. Management

Cash DistributionsThe Price of Document Inception

Date Type of

fund

2003END OF March June March June March June March

Currency by Denomination 37362 37748 40123 40809 44232 45427 49969

PT 25 104 101 118 115 134 128 144

PT 50 260 252 244 216 235 225 250

LE 1 525 453 431 405 453 427 481

LE 5 1102 1066 1195 1187 1080 1047 1115

LE 10 5662 5501 5702 5656 5781 5745 5801

LE 20 12010 11899 11654 11589 12068 12005 11969

LE 50 11135 11821 12800 13409 13673 15035 18686

LE 100 6564 6655 7979 8232 10808 10815 11523

Source : Central Bank of Egypt.

- 161 -

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

2000 2001 2002

2003END OF March June March June March June March

Total 37027 37634 39836 40728 43847 45377 49481

Auxiliary Coins & Notes* 190 191 197 199 204 206 211

PT 25 103 100 116 113 131 126 143

PT 50 184 186 234 209 224 221 246

LE 1 423 389 421 400 446 422 470

LE 5 1091 1051 1168 1169 1066 1034 1087

LE 10 5623 5473 5657 5622 5718 5718 5752

LE 20 11865 11845 11469 11507 11903 11948 11849

LE 50 11025 11768 12650 13340 13502 14938 18505

LE 100 6523 6631 7924 8169 10653 10764 11218

Source : Central Bank of Egypt.

* Issued by the Ministry of Finance.

- 162 -

(1/2/2) Currency in Circulation outside CBE by Denomination( LE mn )

2000 2001 2002

July/MarchDuring 1997/98 1998/99 1999/2000 2000/2001 2001/2002 2001/2002 2002/2003

Cairo Branch

Number of cheques (thousands) 6642 6852 7087 6881 6737 4917 7037

Value of cheques (LE mn) 276141 296289 289111 249613 232323 176538 162681

Alexandria Branch

Number of cheques (thousands) 1274 1330 1287 1182 1037 799 501

Value of cheques (LE mn) 43943 49718 45061 39156 35208 27622 19715

Port - Said Branch

Number of cheques (thousands) 186 195 181 165 144 112 85

Value of cheques (LE mn) 3876 4239 3911 3399 3012 2311 1883

All Branches

Number of cheques (thousands) 8102 8377 8555 8228 7918 5828 7623

Value of cheques (LE mn) 323960 350246 338083 292168 270543 206471 184279

Source : Central Bank of Egypt .

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

- 163 -

2003END OF March June March June March June March

Assets

Cash 2934 2919 3035 2894 3696 3566 4302

Securities & investments, of which: 55494 55285 61453 65303 75279 80377 100344

Treasury bills 19087 18606 23341 26054 32439 36771 48251

Other gov. securities 17450 18058 18927 18934 21056 21562 28727

Balances with banks in Egypt 39175 41563 54213 56040 67898 69721 83310

Balances with banks abroad 11141 11477 10690 10274 9783 12149 14477

Loans and discounts 169436 172276 180143 182627 197835 199497 211570

Other assets 26733 17136 29581 21258 34979 25227 34491

Assets =Liabilties 304913 300656 339115 338396 389470 390537 448494

Liabilties

Capital 7255 7276 7291 7322 7375 7410 7436

Reserves 7415 7667 8278 8492 9066 9373 9928

Provisions 22454 21730 23924 24255 26718 27544 30062

Long term loans & Bonds 6600 6256 7890 7507 8629 8655 9972

Obligations to banks in Egypt 10621 11865 13506 14559 17737 18937 18847

Obligations to banks abroad 5799 6569 7431 8817 8767 9274 12381

Total deposits 211811 218895 235450 244532 272152 283967 318217

Other liabilities 32958 20398 35345 22912 39026 25377 41651

Source : Central Bank of Egypt.

- 164 -

(1/3/1) Commercial Banks : Aggregate Financial Position ( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total Deposits 211811 218895 235450 244532 272152 283967 318217

Demand deposits 18592 19866 19479 21727 22749 24199 26967

Time & saving deposits 178522 184272 199679 205903 228866 240056 271214

Blocked or retained deposits 14697 14757 16292 16902 20537 19712 20036

Local Currency Deposits 164589 169815 178646 186252 201642 211159 224043

Demand deposits 13521 14844 13841 14996 15697 16962 17326

Time & saving deposits 140174 143991 153152 159267 171738 180283 194551

Blocked or retained deposits 10894 10980 11653 11989 14207 13914 12166

Foreign Currencies Deposits 47222 49080 56804 58280 70510 72808 94174

Demand deposits 5071 5022 5638 6731 7052 7237 9641

Time & saving deposits 38348 40281 46527 46636 57128 59773 76663

Blocked or retained deposits 3803 3777 4639 4913 6330 5798 7870

Source : Central Bank of Egypt.

- 165 -

(1/3/2) Commercial Banks : Deposits by Maturity( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total (1+2) 143515 147418 152983 159297 169387 177652 1924331-Total Deposits 143515 147418 152983 142725 148629 155439 157091

First: Demand Deposits 13553 14385 15462 14785 16151 17133 16321A - Free 11580 12343 13494 12841 13109 14422 14161B - Blocked 1973 2042 1968 1944 3042 2711 2160

Second: Saving Deposits 129962 133033 137521 127940 132478 138306 140770A - Free During one month 15755 16382 16954 13214 12951 12724 14566 For 1 to 3 months 29689 28325 28169 26454 27783 27488 25007 For 3 to 6 months 10961 10518 9777 12431 10936 11037 10348 For 6 to one year 6449 6498 6583 3906 4498 4342 4415 After one year 11022 10629 11125 2116 2902 2999 1846B - Blocked 8684 8910 9285 9292 9287 9064 7802C - Saving Funds 45644 50083 53876 59339 63018 69608 75255D - Others 1758 1688 1752 1188 1103 1044 1531

2-Saving Systems 0 0 0 16572 20758 22213 35342 Less than three years 0 0 0 9147 8539 8666 9281 Three years and above 0 0 0 7425 12219 13547 26061Source : Central Bank of Egypt.

- 166 -

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

( LE mn )2000 2001 2002

2003END OF March June March June March June March

Total Deposits 211811 218895 235450 244532 272152 283967 318217

Local Currency Deposits 164589 169815 178646 186252 201642 211159 224043

Government sector 21559 23021 26772 27816 34619 35403 39375

Public business sector * 10021 9776 9383 9640 10345 10476 9656

Private business sector 23237 22705 21931 20954 21133 22172 20838

Household sector 109534 114070 120380 127621 135387 142884 153911

Foreign sector ** 238 243 180 221 158 224 263

Foreign Currencies Deposits 47222 49080 56804 58280 70510 72808 94174

Government sector 10056 9937 9656 8744 10472 11305 16010

Public business sector * 1736 1922 1854 1927 1599 1565 1941

Private business sector 9748 9817 12180 12710 13890 13390 16746

Household sector 25020 26669 32306 34068 43764 45903 59120

Foreign sector ** 662 735 808 831 785 645 357

Source : Central Bank of Egypt.

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

**Including counterpart deposits of US aid .

- 167 -

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

2000 2001 2002

2003END OF March June March June March June March

Total Deposits 211811 218895 235450 244532 272152 283967 318217

Local Currency Deposits 164589 169815 178646 186252 201642 211159 224043

Agriculture 1808 1809 1215 1178 1081 1098 1132

Industry 12539 12644 12193 11871 11623 12584 11328

Trade 7251 7304 6901 6849 8428 7997 8064

Services 15310 14720 14562 14297 14918 15185 15212

Unclassified sectors 127681 133338 143775 152057 165592 174295 188307

Foreign Currencies Deposits 47222 49080 56804 58280 70510 72808 94174

Agriculture 231 236 292 270 346 326 362

Industry 5614 5490 5661 7060 6856 6911 9321

Trade 2131 2132 2725 2475 3101 3082 3641

Services 6127 6061 7181 6853 7387 7147 8846

Unclassified sectors 33119 35161 40945 41622 52820 55342 72004

Source : Central Bank of Egypt .

- 168 -

(1/3/5) Commercial Banks : Deposits by Economic Activity( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total 169436 172276 180143 182627 197835 199497 211570

In Local Currency 133813 135952 141727 143933 154538 156366 159947

Government sector 4091 4329 4953 4943 4842 5191 4386

Public business sector * 27641 26991 24176 23775 24945 24747 25701

Private business sector 87948 90129 97251 99446 108814 110557 113411

Household sector 13240 13592 14305 14602 14748 15288 16090

Foreign sector 893 911 1042 1167 1189 583 359

In Foreign Currencies 35623 36324 38416 38694 43297 43131 51623

Government sector 3011 3085 3248 3651 4388 4313 3912

Public business sector * 3671 3616 3773 3721 4294 4311 6848

Private business sector 26386 26944 28884 28794 32230 32330 38754

Household sector 891 917 681 698 829 803 803

Foreign sector 1664 1762 1830 1830 1556 1374 1306

Source : Central Bank of Egypt.

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

- 169 -

(1/3/6) Commercial Banks : Lending and Discount Balances by sector( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total 169436 172276 180143 182627 197835 199497 211570

In Local Currency 133813 135952 141727 143933 154538 156366 159947

Agriculture 3110 3241 2908 2919 3090 3160 3272

Industry 48006 49473 53369 54345 60365 61317 61628

Trade 36141 35977 35186 35421 38273 38538 40043

Services 32299 32656 34791 35394 36639 37270 38405

Unclassified sectors 14257 14605 15473 15854 16171 16081 16599

In Foreign Currencies 35623 36324 38416 38694 43297 43131 51623

Agriculture 363 394 348 335 384 379 432

Industry 13993 14175 15274 15737 16156 16272 20049

Trade 5696 5732 5886 5595 6576 6593 8845

Services 13014 13341 14396 14498 17796 17704 20181

Unclassified sectors 2557 2682 2512 2529 2385 2183 2116

Source : Central Bank of Egypt .

- 170 -

(1/3/7) Commercial Banks : Lending and Discount Balances by Economic Activity( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total 168294 171014 179028 181446 196562 198303 210770

Up to One Year Maturity 114072 113858 115743 116894 125496 124024 128903

With in kind guarantees 39949 40213 38596 39308 40784 40800 43010

Without in kind guarantees 74123 73645 77147 77586 84712 83224 85893

More than One Year Maturity 54222 57156 63285 64552 71066 74279 81867

With mortgage guarantee 3775 4083 5260 5597 7847 8725 10825

With other guarantees 50447 53073 58025 58955 63219 65554 71042

Source : Central Bank of Egypt.

- 171 -

(1/3/8) Commercial Banks : Loans and Advances (Excluding Discount Balances) by Maturity and Type of Guarantee

( LE mn )2000 2001 2002

2003END OF March June March June March June March

Assets

Cash 396 408 472 468 638 711 923

Securities & investments, of which: 4987 5168 5262 5505 6527 7026 9062

Treasury bills 1725 1995 2188 2388 2437 2969 4098

Other gov. securities 1907 1783 1866 1917 2777 2811 3262

Balances with banks in Egypt 7656 7485 9438 10249 12625 12585 15915

Balances with banks abroad 6330 6268 6968 5896 7819 7803 10471

Loans and discounts 29912 30478 31746 32430 35714 37562 39300

Other assets 4916 5591 5754 6133 5817 6420 6340

Assets =Liabilties 54197 55398 59640 60681 69140 72107 82011

Liabilities

Capital 2684 2700 2951 2928 3325 3333 4433

Reserves 1095 1153 1201 1238 1281 1409 1286

Provisions 3777 3888 4312 4426 5248 5366 6463

Long-term loans & bonds 2184 2167 2066 2193 2868 2514 2451

Obligations to banks in Egypt 6758 6157 6952 6701 8275 8371 7781

Obligations to banks abroad 3295 3353 2792 2610 2324 2522 2741

Total deposits 29032 30050 33364 33996 39845 42172 50172

Other liabilities 5372 5930 6003 6589 5974 6420 6684

Source : Central Bank of Egypt.

- 172 -

( LE mn )(1/4/1) Business and Investment Banks : Aggregate Financial Position

2000 2001 2002

2003END OF March June March June March June March

Total Deposits 29032 30050 33364 33996 39845 42172 50172

Demand deposits 3534 3801 3785 3977 5419 5786 7186

Time & saving deposits 22242 22839 26599 27260 31490 33121 39463

Blocked or retained deposits 3256 3410 2980 2759 2936 3265 3523

Local Currency Deposits 18051 18536 18719 19665 22950 24616 27516

Demand deposits 2161 2421 2056 2422 2565 3179 3533

Time & saving deposits 13742 14009 15364 15919 18682 19717 22739

Blocked or retained deposits 2148 2106 1299 1324 1703 1720 1244

Foreign Currencies Deposits 10981 11514 14645 14331 16895 17556 22656

Demand deposits 1373 1380 1729 1555 2854 2607 3653

Time & saving deposits 8500 8830 11235 11341 12808 13404 16724

Blocked or retained deposits 1108 1304 1681 1435 1233 1545 2279

Source : Central Bank of Egypt.

- 173 -

(1/4/2) Business and Investment Banks : Deposits by Maturity( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total (1+2) 15812 16494 16711 17688 20882 22564 250031-Total Deposits 15812 16494 16711 17436 16292 17425 15888

First : Demand Deposits 2114 2447 2123 2460 2529 3209 3348A - Free 1990 2236 1933 2254 2347 3011 3151B- Blocked 124 211 190 206 182 198 197

Second: Saving Deposits 13698 14047 14588 14976 13763 14216 12540A - Free During one month 2137 2429 2865 2917 2924 3080 2509 For 1 to 3 months 4933 5277 5632 5724 5755 5816 4587 For 3 to 6 months 1455 1446 1435 1556 1307 1242 1057 For 6 to one year 542 306 469 374 584 238 272 After one year 2052 2147 2319 2361 473 962 1075B - Blocked 1723 1524 872 928 1328 1324 855C - Saving Funds 646 669 838 964 1239 1417 1540D - Others 210 249 158 152 153 137 645

2-Saving Systems - - - 252 4590 5139 9115 Less than three years - - - 37 21 19 14 Three years and above - - - 215 4569 5120 9101Source : Central Bank of Egypt .

in Local Currency by Maturity( LE mn )

(1/4/3) Business and Investment Banks : Non- Government Deposits & Saving Systems

- 174 -2000 2001 2002

2003END OF March June March June March June March

Total Deposits 29032 30050 33364 33996 39845 42172 50172

Local Currency Deposits 18051 18536 18719 19665 22950 24616 27516

Government sector 2100 1825 1852 1882 1960 1938 2895

Public business sector * 1541 1724 1922 1935 1725 2136 2011

Private business sector 6366 6465 5678 5973 6790 7249 7256

Household sector 7915 8454 9208 9802 12357 13162 15163

Foreign sector 129 68 59 73 118 131 191

Foreign Currencies Deposits 10981 11514 14645 14331 16895 17556 22656

Government sector 1699 1958 2179 2191 2010 2008 2566

Public business sector * 458 495 639 631 580 613 938

Private business sector 3240 3808 5053 4747 5649 5935 7656

Household sector 5440 5137 6642 6639 8475 8802 11317

Foreign sector 144 116 132 123 181 198 179

Source : Central Bank of Egypt.

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

- 175 -

(1/4/4) Business and Investment Banks : Deposits by Sector( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total Deposits 29032 30050 33364 33996 39845 42172 50172

Local Currency Deposits 18051 18536 18719 19665 22950 24616 27516

Agriculture 257 276 266 300 335 233 383

Industry 2269 2440 2244 2375 2646 3071 3456

Trade 2884 3016 2136 2190 2230 2359 1978

Services 3201 3086 3411 3521 3793 4214 4117

Unclassified sectors 9440 9718 10662 11279 13946 14739 17582

Foreign Currencies Deposits 10981 11514 14645 14331 16895 17556 22656

Agriculture 93 91 45 55 89 100 126

Industry 1308 1681 2217 2058 2758 2669 3053

Trade 1243 1455 2058 2020 1857 1986 2371

Services 1023 1212 1495 1271 1540 1753 3108

Unclassified sectors 7314 7075 8830 8927 10651 11048 13998

Source : Central Bank of Egypt.

- 176 -

( LE mn )(1/4/5) Business and Investment Banks : Deposits by Economic Activity

2000 2001 2002

2003END OF March June March June March June March

Total 29912 30478 31746 32430 35714 37562 39300

In Local Currency 20719 21266 23584 24201 26520 28185 27589

Government sector 2439 2440 2449 2507 2570 2619 2720

Public business sector * 932 733 735 615 853 750 1015

Private business sector 15190 15945 17844 18315 19977 21511 20357

Household sector 2117 2145 2539 2608 3065 3285 3474

Foreign sector 41 3 17 156 55 20 23

In Foreign Currencies 9193 9212 8162 8229 9194 9377 11711

Government sector 129 171 188 201 144 348 422

Public business sector * 781 768 525 478 745 749 1005

Private business sector 7788 7785 6979 7028 7680 7756 9686

Household sector 388 398 217 290 271 267 296

Foreign sector 107 90 253 232 354 257 302

Source : Central Bank of Egypt.

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

- 177 -

(1/4/6) Business and Investment Banks : Lending and Discount Balances by Sector( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total 29912 30478 31746 32430 35714 37562 39300

In Local Currency 20719 21266 23584 24201 26520 28185 27589

Agriculture 416 432 351 379 310 458 408

Industry 7328 7519 8455 9091 9752 10199 9184

Trade 5651 5961 6694 6224 7225 7514 7381

Services 5117 5156 5483 5702 6074 6661 7083

Unclassified sectors 2207 2198 2601 2805 3159 3353 3533

In Foreign Currencies 9193 9212 8162 8229 9194 9377 11711

Agriculture 100 103 154 189 156 151 236

Industry 4303 4247 3551 3652 3860 3820 4848

Trade 2928 3058 2526 2388 2637 2582 3146

Services 1366 1316 1461 1474 1917 2298 2883

Unclassified sectors 496 488 470 526 624 526 598

Source : Central Bank of Egypt.

- 178 -

(1/4/7) Business and Investment Banks : Lending and Discount Balances by Economic Activity( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total 29533 30032 31199 31900 35043 36916 38576

Up to One Year Maturity 22557 22701 23564 24062 26176 27444 28030

With in kind guarantees 7967 7981 8288 8405 8923 9711 9191

Without in kind guarantees 14590 14720 15276 15657 17253 17733 18839

More than One Year Maturity 6976 7331 7635 7838 8867 9472 10546

With in kind guarantees 5839 6183 6297 6446 6978 7297 7997

Without in kind guarantees 1137 1148 1338 1392 1889 2175 2549

Source : Central Bank of Egypt .

- 179 -

(1/4/8) Business and Investment Banks : Loans and Advances(Excluding Discount Balances) by Maturity and Type of Guarantee

( LE mn )2000 2001 2002

2003END OF March June March June March June March

Assets

Cash 126 104 141 123 193 176 220

Securities & investments, of which: 372 365 374 334 347 323 1338

Treasury bills - - - - - - -

Other gov. securities 46 46 47 48 48 50 1050

Balances with banks in Egypt 500 352 547 758 582 939 1531

Balances with banks abroad 37 31 25 82 23 50 102

Loans and discounts 23517 24022 25336 26413 28862 29041 30770

Other assets 3411 1410 3475 1575 4128 2292 4611

Assets =Liabilities 27963 26284 29898 29285 34135 32821 38572

Liabilities

Capital 1788 1788 1788 1788 1788 1788 1793

Reserves 406 406 412 426 443 456 505

Provisions 1877 1936 2095 2519 2802 2959 3141

Long-term loans & Bonds 2081 2156 2345 2222 3023 2888 2367

Obligations to banks in Egypt 6626 6188 6628 6898 7360 7786 8113

Obligations to banks abroad 10 48 49 59 53 35 60

Total deposits 10793 11484 12223 12696 13801 14729 16266

Other liabilities 4382 2278 4358 2677 4865 2180 6327

Source : Central Bank of Egypt.

- 180 -

( LE mn )(1/5/1) Specialized Banks : Aggregate Financial Position

2000 2001 2002

2003END OF March June March June March June March

Total Deposits 10793 11484 12223 12696 13801 14729 16266

Demand deposits 861 874 879 974 907 928 973

Time & saving deposits 9887 10594 11301 11695 12880 13775 15181

Blocked or retained deposits 45 16 43 27 14 26 112

Local Currency Deposits 10567 11268 11912 12320 13392 14331 15795

Demand deposits 835 866 873 936 898 922 970

Time & saving deposits 9700 10389 11009 11359 12484 13385 14715

Blocked or retained deposits 32 13 30 25 10 24 110

Foreign Currencies Deposits 226 216 311 376 409 398 471

Demand deposits 26 8 6 38 9 6 3

Time & saving deposits 187 205 292 336 396 390 466

Blocked or retained deposits 13 3 13 2 4 2 2

Source : Central Bank of Egypt.

- 181 -

(1/5/2) Specialized Banks: Deposits by Maturity( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total Deposits 10793 11484 12223 12696 13801 14729 16266

Local Currency Deposits 10567 11268 11912 12320 13392 14331 15795

Government sector 1311 1355 1378 1366 1227 1237 1532

Public business sector * 1210 1311 1404 1239 1311 1318 1372

Private business sector 1773 1806 1958 2152 2143 2173 1994

Household sector 6273 6796 7172 7563 8710 9602 10897

Foreign sector - - - - 1 1 -

Foreign Currencies Deposits 226 216 311 376 409 398 471

Government sector 23 3 8 8 15 15 18

Public business sector * 89 97 20 22 22 16 7

Private business sector 70 78 89 108 110 101 82

Household sector 44 38 31 75 67 70 120

Foreign sector - - 163 163 195 196 244

Source : Central Bank of Egypt.

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

- 182 -

(1/5/3) Specialized Banks : Deposits by Sector( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total Deposits 10793 11484 12223 12696 13801 14729 16266

Local Currency Deposits 10567 11268 11912 12320 13392 14331 15795

Agriculture 668 704 808 824 864 904 581

Industry 280 275 308 299 311 329 331

Trade 126 115 134 121 129 137 119

Services 1171 1202 1222 1290 1224 1245 1694

Unclassified sectors 8322 8972 9440 9786 10864 11716 13070

Foreign Currencies Deposits 226 216 311 376 409 398 471

Agriculture - - - - - - -

Industry 20 7 13 3 5 2 3

Trade - - - 2 - 3 4

Services 52 72 75 102 105 96 75

Unclassified sectors 154 137 223 269 299 297 389

Source : Central Bank of Egypt.

- 183 -

( LE mn )(1/5/4) Specialized Banks : Deposits by Economic Activity

2000 2001 2002

2003END OF March June March June March June March

Total 23517 24022 25336 26413 28862 29041 30770

In Local Currency 22966 23455 24808 25848 28302 28457 30069

Government sector 2434 2384 2233 2072 1986 2091 1921

Public business sector * 3 3 5 352 296 334 778

Private business sector 8725 9097 10359 10857 12074 12378 12517

Household sector 11804 11971 12211 12567 13946 13652 14851

Foreign sector - - - - - 2 2

In Foreign Currencies 551 567 528 565 560 584 701

Government sector - - 1 - - - -

Public business sector * - - - - - - -

Private business sector 549 567 527 565 560 584 701

Household sector 2 - - - - - -

Foreign sector - - - - - - -

Source : Central Bank of Egypt.

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

- 184 -

(1/5/5) Specialized Banks : Lending and Discount Balances by Sector( LE mn )

2000 2001 2002

2003END OF March June March June March June March

Total 23517 24022 25336 26413 28862 29041 30770

In Local Currency 22966 23455 24808 25848 28302 28457 30069

Agriculture 1218 1155 1220 1451 1516 1548 802

Industry 1349 1418 1463 1514 1589 1662 2106

Trade 990 981 1105 1152 1230 1199 1290

Services 7556 7894 8808 9164 10021 10394 11019

Unclassified sectors 11853 12007 12212 12567 13946 13654 14852

In Foreign Currencies 551 567 528 565 560 584 701

Agriculture 27 29 28 30 20 20 10

Industry 369 395 357 383 433 469 482

Trade - - - - - - -

Services 153 143 143 152 107 95 209

Unclassified sectors 2 - - - - - -

Source : Central Bank of Egypt.

- 185 -

( LE mn )(1/5/6) Specialized Banks : Lending and Discount Balances by Economic Activity

2000 2001 2002

in Egyptian Pounds

Average Interest Rates in Banks

Interest Rate on Investment Certificates

on three month

deposits

on one year-or less

maturity loans

Simple Return

of increasing certificate

valueJan-01 12.00 9.44 13.55 12.00 11.50 11.50Feb. 12.00 9.46 13.40 " " "March 12.00 9.76 13.73 " " "Apr. 11.00 9.32 13.30 " " "May 11.00 9.54 13.89 " " "June 11.00 9.43 13.57 " " "July 11.00 9.58 12.88 " " "Aug. 11.00 9.44 13.18 " " "Sept. 11.00 9.44 12.88 " " "Oct. 11.00 9.47 12.84 11.50 11.00 "Nov. 11.00 9.48 12.91 " " "Dec. 11.00 9.34 13.38 " " "Jan-02 11.00 9.52 13.72 " " "Feb. 11.00 9.49 13.74 " " "March 11.00 9.54 13.59 " " "Apr. 11.00 9.54 13.78 " " "May 11.00 9.52 13.76 " " "June 11.00 9.42 14.10 " " "July 11.00 9.46 13.99 " " "Aug. 11.00 9.43 13.75 " " "Sept. 11.00 9.33 13.89 " " "Oct. 11.00 9.14 13.67 " " "Nov. 10.00 8.75 13.73 10.50 10.00 10.50Dec. 10.00 8.73 13.64 " " "Jan-03 10.00 8.27 13.80 " " "Feb. 10.00 8.03 13.78 " " "March 10.00 8.12 13.39 " " "

Source : Central Bank of Egypt, General Authority for Post Saving.*Calculated as additional interest of 0.25% for deposits of one year maturity.

(1/6 ) The Discount Rate and Interest Rates on Deposits and Loans

End of Discount rate

- 186 -

(% Annually)

Interest Rate on Post Office

Saving Deposits*

END OF U.S. Dollar Pound Sterling Deutsche Mark French FrancMin Max Min Max Min Max Min Max

Jan-2001 5.25 5.44 4.69 5.44 3.69 4.19 3.69 4.19Feb. 5.00 5.19 4.56 5.31 3.69 4.19 3.69 4.19March 4.56 4.75 4.38 5.13 3.63 4.13 3.63 4.13Apr. 4.00 4.19 4.25 5.00 3.63 4.13 3.63 4.13May 3.69 3.88 4.13 4.88 3.44 3.94 3.44 3.94June 3.38 3.56 4.13 4.88 3.31 3.81 3.31 3.81July 3.38 3.56 4.13 4.88 3.31 3.81 3.31 3.81Aug. 3.19 3.38 3.88 4.63 3.19 3.69 3.19 3.69Sept. 2.25 2.44 3.38 4.13 2.50 3.00 2.50 3.00Oct. 1.94 2.13 3.19 3.94 2.44 2.94 2.44 2.94Nov. 1.75 1.94 2.81 3.56 2.25 2.75 2.25 2.75Dec. 1.63 1.81 2.94 3.69 2.25 2.75 2.25 2.75

Jan-2002 1.56 1.75 2.88 3.63Feb. 1.56 1.75 2.94 3.69March 1.75 1.94 3.06 3.81Apr. 1.63 1.81 3.06 3.81May 1.56 1.75 3.06 3.81June 1.56 1.75 3.00 3.75July 1.50 1.69 2.88 3.63Aug. 1.50 1.69 2.88 3.63Sept. 1.50 1.69 2.81 3.56Oct. 1.38 1.56 2.81 3.56Nov. 1.13 1.31 2.88 3.63Dec. 1.06 1.25 2.94 3.69Jan-2003 1.06 1.25 2.88 3.63Feb. 1.00 1.19 2.56 3.31March 1.00 1.19 2.56 3.31

Source : National Bank of Egypt.

2.882.88

2.56 2.81

2.94

2.752.882.942.883.00

- 187 -

Min Max

(1/7 ) Domestic Interest Rates on 3 Month Depositsof Major Currencies

( % Annually )

Euro

2.50 2.752.31 2.562.19 2.44

2.252.632.692.632.752.692.632.63

1.75 2.00

2.06 2.311.81 2.06

( % )

91 days 182 days 364 days January 2003 January 2003 January 2003The: The :

First week (2/1) - First week - -

Second (9/1) 5.004 Second (7/1) -

Third (16/1) 4.603 Third (14/1) 5.242

Fourth (23/1) 4.817 Fourth (21/1) - No new issues

(30/1) 6.313 (28/1) 5.307

Monthly Average 5.184 Monthly Average 5.275

February 2003 February 2003 February 2003 The: The :

First week (6/2) 8.676 First week (4/2) 8.568

Second (13/2) - Second (11/2) - No new issues

Third (20/2) 8.272 Third (18/2) 8.510

Fourth (27/2) 7.503 Fourth (25/2) 7.845

Monthly Average 8.150 Monthly Average 8.308

March 2003 March 2003 March 2003The: The:

First week (6/3) 9.300 First week (4/3) -

Second (13/3) 10.032 Second (11/3) 9.759

Third (20/3) 11.528 Third (18/3) 10.855 No new issues

Fourth (27/3) 13.593 Fourth (25/3) 12.184

Monthly Average 11.113 Monthly Average 10.933Source: Central Bank of Egypt.

(1/8) The Return Rate of Treasury bills ( Weekly weighted average)

- 188 -

Change Rate % Groups Relative 2003 July/March The Year Ending

Weights March June March 2002/2003 March 2003

General Index 1000.0 398.2 397.7 445.2 11.9 11.8Farm Products 349.8 340.2 333.0 402.2 20.8 18.2

Foodstuffs 196.6 517.0 517.9 606.5 17.1 17.3

Beverages & Tobacco 45.1 328.5 328.5 340.8 3.7 3.7

Yarn &Textiles 40.7 395.3 396.4 413.6 4.3 4.6

Wearing Apparel 26.0 428.8 429.3 438.4 2.1 2.2

Leather & Footwear 17.1 396.5 404.2 425.4 5.2 7.3

Wood & its Products 17.0 310.7 311.0 358.8 15.4 15.5

Paper & Printing 19.5 354.4 354.4 393.1 10.9 10.9

Chemicals & its products 58.6 402.1 405.5 414.5 2.2 3.1

Fuel & Related Products 47.7 684.6 690.4 682.9 -1.1 -0.2

Rubber & Plastic Products 15.9 287.8 313.5 332.4 6.0 15.5

Nonmetallic Mineral Products 35.3 330.9 332.7 292.6 -12.1 -11.6

Metals 47.8 340.3 352.8 400.9 13.6 17.8

Metallic Prods.,Machinery & Equipment 58.9 317.7 317.8 322.8 1.6 1.6

Transportation Equipment 17.3 362.5 362.5 389.3 7.4 7.4

Other Manufacturing Products 6.7 424.8 426.7 485.8 13.9 14.4

Source : Central Agency for Puplic Mobilization and Statistics (Monthly Bulletin of Wholesale Prices Index).

2002

(1/9) Wholesale Price Index (1986/87=100)

- 189 -

2002 2003 Change Rate %

End of Relative Weights March June March July/March

2002/ 2003

The Year Ending March

2003

General Index 1000.0 126.4 127.1 130.9 3.0 3.6Food,Beverages,and Tobacco 502.2 127.6 128.6 134.5 4.6 5.4

- Grains & Starch 74.7 115.4 115.4 116.9 1.3 1.3 - Meat & Poultry 115.8 125.5 125.5 131.7 4.9 4.9 - Fish 30.1 156.3 156.3 156.3 - - - Milk, Cheese & Eggs 60.1 113.8 113.8 120.7 6.1 6.1 - Oils & Fats 36.5 123.4 123.4 132.1 7.1 7.1 - Fresh & Preserved Fruits 34.8 170.7 189.7 181.9 -4.1 6.6 - Fresh & Preserved Vegetables 47.6 152.7 150.4 172.2 14.5 12.8 - Pulses 9.9 116.2 116.2 122.6 5.5 5.5 - Sugar & Sweets 21.1 109.2 109.2 113.7 4.1 4.1 - Other Foodstuff 22.0 128.8 128.8 135.6 5.3 5.3 - Beverages 15.3 112.4 112.4 116.4 3.6 3.6 - Cigarettes & tobacco 34.3 105.2 105.2 111.3 5.8 5.8

Clothes & Footwear 97.1 124.7 124.7 126.3 1.3 1.3Rent, Power & Fuel 92.9 106.0 106.0 106.8 0.8 0.8Furniture & Housing services 50.1 111.7 111.7 116.9 4.7 4.7Medical care 40.7 118.4 118.4 118.6 0.2 0.2Transportation & Communications 61.7 117.1 119.8 119.8 - 2.3Education, Culture & Recreation 91.5 150.4 150.4 151.7 0.9 0.9Miscellaneous Goods & Services 63.8 142.2 142.2 144.7 1.8 1.8

Source: Central Agency for Public Mobilization and Statistics (Monthly bulletin for consumer price indices).

(1/10) Consumer Price Index (Urban Population ) (1995/96=100)

- 190 -

2002 2003Change Rate %

End of Relative Weights March June March

The Year Ending March

2003General Index 1000.0 121.1 121.6 126.0 4.0Food,Beverages,and Tobacco 606.8 122.9 123.6 130.0 5.8

- Grains & Starch .. 116.1 116.1 122.1 5.2 - Meat & Poultry .. 123.0 123.3 128.1 4.1 - Fish .. 142.3 142.3 139.1 -2.2 - Milk, Cheese & Eggs .. 110.6 110.6 115.1 4.1 - Oils & Fats .. 120.7 120.7 129.7 7.5 - Fresh & Preserved Fruits .. 177.6 182.8 201.0 13.2 - Fresh & Preserved Vegetables .. 146.2 150.1 157.9 8.0 - Pulses .. 111.9 111.9 120.1 7.3 - Sugar & Sweets .. 106.3 106.3 112.0 5.4 - Other Foodstuff .. 108.6 108.6 120.9 11.3 - Beverages .. 107.3 107.3 111.2 3.6 - Cigarettes & tobacco .. 109.2 109.2 116.2 6.4

Clothes & Footwear 85.2 118.0 118.0 119.1 0.9Rent, Power & Fuel 110.2 105.9 105.9 105.9 -Furniture & Housing services 40.1 104.2 104.2 110.3 5.9Medical care 35.3 123.1 123.1 123.4 0.2Transportation & Communications 28.8 107.0 110.6 110.6 3.4Education, Culture & Recreation 57.7 150.6 150.6 151.9 0.9Miscellaneous Goods & Services 35.9 125.5 125.5 128.9 2.7

Source: Central Agency for Public Mobilization and Statistics (Monthly bulletin for consumer price indices).

(1/11) Consumer Price Index (Rural Population ) (1995/96=100)

- 191 -

2003END OF March June March June March June March

First :Companies Listed in the Official Table

- Number of companies (in unit) 142 141 144 144 147 147 157

- Number of shares (mn) 1925 1884 1533 1525 1532 1533 1969

- Nominal value of Capital (LE mn) 9077 10600 10761 10843 11428 10724 16188

- Market value of Capital (LE mn) 28575 25628 22645 21900 22262 22705 30486

Second :Companies Listed in the Unofficial Tables

- Number of companies (in unit) 909 895 932 928 979 989 994

- Number of shares (mn) 2840 2566 3237 3621 3981 3877 3757

- Nominal value of Capital (LE mn) 58899 58935 64675 65894 77756 78403 80070

- Market value of Capital (LE mn) 108772 94106 87712 88417 95051 95968 106711

Third : All Companies

- Number of companies (in unit) 1051 1036 1076 1072 1126 1136 1151

- Number of shares (mn) 4765 4450 4770 5146 5513 5410 5726

- Nominal value of Capital (LE mn) 67976 69535 75436 76737 89184 89127 96258

- Market value of Capital (LE mn) 137347 119734 110357 110317 117313 118673 137197

Source : Cairo & Alexandria Stock Exchanges.

- 192 -

(2/1) Companies Listed on the Stock Exchange

2000 2001 2002

( LE mn )2003

END OF March June March June March June MarchListed 18773 15785 19220 19371 19677 19268 20478

Government Bonds 14149 11158 14281 14282 14479 14470 14759

Banks Bonds 2528 2528 2745 2545 2615 2215 2051

Companies Bonds 2096 2099 2194 2544 2583 2583 3668

Unlisted 1441 4405 978 628 531 1032 1077

Government Bonds 37 3000 0 0 0 0 2

Banks Bonds 751 751 324 324 353 853 892

Companies Bonds 653 654 654 304 178 179 183

Grand Total 20214 20190 20198 19999 20208 20300 21555

Government Bonds 14186 14158 14281 14282 14479 14470 14761

Banks Bonds 3279 3279 3069 2869 2968 3068 2943

Companies Bonds 2749 2753 2848 2848 2761 2762 3851

Source : Cairo & Alexandria Stock Exchanges.

- 193 -

(2/2) Bonds issued on the Stock Exchange

2000 2001 2002

During Number of

Transactions in unit

Amount in Thousands

M.Value in mn

Number of Transactions

in unit

Amount in Thousands

M.Value in mn

In Egyptian Pounds 832668 898967 16112 556810 642675 8735

Floor Transactions 759086 805076 11113 537995 502678 5639

Over the Counter Trade 73582 93891 4999 18815 139997 3096

In Foreign Currencies (US$) 4206 10448 199 9777 35779 613

Floor Transactions 4068 9659 24 9286 24322 340

Over the Counter Trade 138 789 175 491 11457 273

Source : Capital Market Authority.

(2/3) Transactions in Shares on the Stock Exchange

- 194 -2001/2002 2002/2003

July/ March

During Number of

Transactions Amount M.Value in Number of Transactions Amount M.Value in

Thousands Thousands

In Egyptian Pounds 1121 8660626 9109648 954 9019619 8473097

Floor Transactions 1121 8660626 9109648 952 9019435 8472913

Over the Counter Trade 0 0 0 2 184 184

In Foreign Currencies (US$) 28 934547 119763 42 34681 28592

Floor Transactions 28 934547 119763 42 34681 28592

Over the Counter Trade 0 0 0 0 0 0

Matual Funds Documents 119 67766 23549 48 33598 20100

Floor Transactions 119 67766 23549 48 33598 20100

Source : Capital Market Authority.

(2/4) Transactions in Bonds & Mutual Funds Documents on the Stock Exchange

- 195 -

2001/2002 2002/2003July/ March

( In unit) ( In unit)

June-02 March-03 June-02 March-03

First - July-96 Bank of New York CIB 1 9999 5.15 4.83 27.98 30.40

Second - July-96 Bank of New York CIB 1 7310 6.80 6.05 35.43 37.13

NBE

Third - Feb.-97 Deutsche Bank Citibank 1 16000 8.00 13.60 42.98 65.00

Fourth - Oct.-97 Deutsche Bank Citibank 3 6297 0.83 1.10 13.86 22.46

Fifth - Apr.-98 Bank of New York CIB 2 6496 1.63 1.23 17.91 16.19

Sixth - Aug.-98 Bank of New York HSBC 0.5 4324 1.58 1.08 3.49 3.48

Seventh - June-99 Deutsche Bank Citibank 0.33 573 0.68 0.78 1.21 1.52

Eighth - July-99 Bank of New York CIB 0.33 35000 0.18 0.20 0.00 0.00

Ninth - July-00 Bank of New York CIB 2 11713 0.85 1.29 9.25 16.60

Tenth - Aug.-02 Bank of New York CIB 0.5 50 0.00 10.08 30.03 33.49

Source : Monthly Bulletin of Cairo and Alexandria Exchanges.

- 196 -GDR's Listed on Global Exchange

(2/5) Global Depository Receipts

Corporate Stocks Issued on Egyptian

Exchange

Order and Date of Offering Depository Bank

Sub Custodian

Bank

Conversion Ratio

Volume on

Offering Date

(000's )

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

(LEmn)

End of 91 days 182 days 364 days Total

1997March 10165.1 15780.8 - 25945.9June 11901.7 18829.5 2400.0 33131.2Sept. 10205.9 21728.9 10692.2 42627.0Dec. 10363.0 18809.2 10692.2 39864.41998March 9201.7 17340.1 10692.2 37234.0June 9634.6 17219.8 11145.4 37999.8Sept. 9321.7 16565.7 11145.4 37032.8Dec. 7992.5 12994.4 11145.4 32132.31999March 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 25369.72000March 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 28838.82001March 6195.9 8271.3 14457.4 28924.6June 5762.5 9113.9 14457.4 29333.8Sept. 7687.7 8564.1 14457.4 30709.2Dec. 11451.6 9502.5 14457.4 35411.52002March 10864.0 10240.5 14457.4 35561.9June 11183.2 14366.7 14457.4 40007.3Sept. 14575.7 18411.5 14457.4 47444.6Dec. 15897.1 22908.0 14457.4 53262.5

2003March 15250.8 24259.7 14457.4 53967.9

Source: Central Bank of Egypt.

(2/6) The Outstanding Balance of Treasury Bills (Quarterly)

- 197 -

(LE mn)

91 days 182 days 364 days Total

January 2003 The:

First week (2/1) 15897.1 22908.0 14457.4 53262.5

Second (9/1) 16196.7 22403.8 14457.4 53057.9

Third (16/1) 16501.7 23903.8 14457.4 54862.9

Fourth (23/1) 16601.7 23903.8 14457.4 54962.9

(30/1) 15709.7 24002.6 14457.4 54169.7

End of month (31/1) 15709.7 24002.6 14457.4 54169.7

February 2003The: First week (6/2) 15808.7 24202.6 14457.4 54468.7

Second (13/2) 14304.7 23200.6 14457.4 51962.7

Third (20/2) 14404.7 23313.6 14457.4 52175.7

Fourth (27/2) 15204.7 24513.6 14457.4 54175.7

End of month (28/2) 15204.7 24513.6 14457.4 54175.7

March 2003The: First week (6/3) 16064.7 23627.1 14457.4 54149.2

Second (13/3) 14979.2 22697.1 14457.4 52133.7

Third (20/3) 15270.5 22868.1 14457.4 52596.0

Fourth (27/3) 15250.8 24259.7 14457.4 53967.9

End of month (31/3) 15250.8 24259.7 14457.4 53967.9

Source: Central Bank of Egypt.

(2/7) The Outstanding Balance of Treasury Bills (Weekly)

- 198 -

CirculationIssuance Value Period & Interest Date in the

Date (LEmn) Maturity Date Rate Stock Exchange

T.Bonds 2003 8/9 - 30/9/1996 4000 7 Years , 1/10/2003 11% 1/1/1997

T.Bonds 2005First issue 2/8 - 15/8/1998 500 7 Years , 16/8/2005 10% 16/11/1998

Second issue 1/9 - 15/9/1998 500 7 Years , 16/9/2005 10% 16/12/1998

Third issue 1/10 - 15/10/1998 500 7 Years , 16/10/2005 10% 16/1/1999

T.Bonds 2006 3/1 - 14/1/1999 500 7 Years , 15/1/2006 10% 15/4/1999

T.Bonds 2009First issue 21/2 - 28/2/1999 2000 10 Years , 1/3/2009 9.5% 1/6/1999

Second issue 1/4- 15/4/1999 2000 10 Years, 16/4/2009 10% 16/7/1999

T.Bonds 2007 9/4- 2/5/2000 3000 7 Years, 3/5/2007 11% 2/8/2000

Source: Central Bank of Egypt.* Issued by Law No. 4 /1995.

(2/8) The Outstanding Balance of Treasury Bonds*- 199 -

( LE mn )

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

The Budget Sector

The Budget Sector, NIB & GASC

The Budget

Sector,NIB, GASC &

SIFs

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

Total Expenditure and Net Lending 69936 82685 86292 111558 133277 128804 78918 96046 92779

Total Expenditure 69827 77503 80483 110957 125289 120699 78085 89577 86493

Current Expenditure 59525 67201 70181 94133 108465 103875 67370 78862 75778

Wages and salaries 20235 20235 20435 31554 31554 31848 22298 22298 22520

Other Current Expenditure 39290 46966 49746 62579 76911 72027 45072 56564 53258

Defense 8097 8097 8097 11115 11115 11115 8584 8584 8584

Interest 15521 23796 14046 27100 41890 25278 19088 30742 17910

Domestic 13287 21562 11812 24000 38790 22178 16513 28167 15335

Foreign 2234 2234 2234 3100 3100 3100 2575 2575 2575

Other 15672 15073 27603 24364 23906 35634 17400 17238 26764

Capital Expenditure 10302 10302 10302 16824 16824 16824 10715 10715 10715

Lending Minus Repayments 109 5182 5809 601 7988 8105 833 6469 6286

Source : The Ministry of Finance .* Provisional

(3/1) Consolidated Fiscal Operations of General Government

( The Budget sector , NIB , GASC and SIFs )

(Total Expenditure and Net Lending )

2001/2002 2002/2003

-200 -

9 Months (Actual) Revised Estimates 9 Months (Actual) *

( LE mn )

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

Total Revenue and Grants 51212 59509 78088 85724 100056 114902 53257 63788 73519

Total Revenue 49402 57699 76278 82237 96569 111415 51462 61993 71724

Current Revenue 48756 57053 75632 81181 95513 110359 50754 61285 71016

Tax Revenue 34871 34871 34871 57021 57021 57021 36391 36391 36391

Income Taxes 14121 14121 14121 22102 22102 22102 14371 14371 14371

Goods and Services 13825 13825 13825 23358 23358 23358 14422 14422 14422

International Trade 6799 6799 6799 11374 11374 11374 7498 7498 7498

Other 126 126 126 187 187 187 100 100 100

Non-Tax Revenue 13885 22182 40761 24160 38492 53338 14363 24894 34625

Capital Revenue 646 646 646 1056 1056 1056 708 708 708

Grants 1810 1810 1810 3487 3487 3487 1795 1795 1795

Source : The Ministry of Finance .

* Provisional

(3/2) Consolidated Fiscal Operations of General Government ( The Budget sector , NIB & GASC and SIFs )

(Total Revenue and Grants )

2001/2002 2002/2003 - 201 -

9 Months (Actual) Revised Estimates 9 Months (Actual) *

( LE mn )

9 Months (Actual) *

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

The Budget Sector

The Budget Sector, NIB & GASC

The Budget Sector,NIB,

GASC & SIFs

Total Revenue and Grants 51212 59509 78088 85724 100056 114902 53257 63788 73519Total Expenditure and Net Lending 69936 82685 86292 111558 133277 128804 78918 96046 92779Overall Deficit / Surplus -18724 -23176 -8204 -25834 -33221 -13902 -25661 -32258 -19260Total Financing 18724 23176 8204 25834 33221 13902 25661 32258 19260- Foreign Financing 3917 3917 3917 -3292 -3292 -3292 -3134 -3134 -3134- Domestic Financing 17914 22366 18766 31626 39013 18629 32226 39014 33261

Banking 15181 15325 15070 25165 24459 22382 26986 25366 22113

Liabilities 28425 28425 28425 35665 35665 35665 33241 33241 33241

Deposits 17322 17178 17433 19000 19706 21783 16571 18191 21444

Exchange Rate Revaluation 4078 4078 4078 8500 8500 8500 10316 10316 10316

Non-Banking 2733 7041 3696 6461 14554 -3753 5240 13648 11148

NIB to government 9642 13950 10605 12488 20581 2274 8037 16445 13945 Other -6909 -6909 -6909 -6027 -6027 -6027 -2797 -2797 -2797

- Privatization Proceeds 361 361 361 500 500 500 36 36 36

- Other (assumption of Debt) 0 0 0 -500 -500 565 -15 -15 -6

- Adjustment to cash / errors and omissions -3468 -3468 -14840 -2500 -2500 -2500 -3452 -3643 -10897

Overall Deficit or Surplus / GDP -4.9% -6.1% -2.1% -6.4% -8.2% -3.4% -6.3% -8.0% -4.8%

Total Revenue and Grants/GDP 13.5% 15.7% 20.6% 21.2% 24.7% 28.4% 13.2% 15.8% 18.1%

Total Expenditure and Net Lending/GDP 18.4% 21.8% 22.7% 27.6% 32.9% 31.8% 19.5% 23.8% 22.9%Source : The Ministry of Finance .* Provisional

(3/3)Summary of The Consolidated Fiscal Operations of General Government ( The Budget sector , NIB , GASC and SIFs )

2001/2002 2002/2003

- 202 -

9 Months (Actual) Revised Estimates

(LE mn)

End of Change +(-)

Value % Value % 2002/2003

Government Domestic Debt 221224 100.0 246467 100.0 25243 - Bonds & Bills 165907 75.0 184619 74.9 18712

- Treasury bonds, of which : 113091 51.1 115276 46.8 2185

Euro sovereign bonds offered abroad * 2511 1.1 4696 1.9 2185

Bonds in local currency with public sector banks 0 0 4000 1.6 4000

- Government securities to compensate the actuarial reserve

deficit in social insurance funds 2000 0.9 2000 0.8 -

- Housing bonds 136 0.1 132 0.1 -4

- Treasury bills 40007 18.1 53968 21.9 13961

- Bonds to cover foreign currency exposure in

commercial public sector banks 9406 4.2 11973 4.8 2567

- Accumulated 5% of companies profit earmarked to

be invested in government bonds 1267 0.6 1270 0.5 3

- Net Government Balances with the Banking System -58469 -26.4 -57975 -23.5 494 - Government Borrowing from NIB 113786 51.4 119823 48.6 6037

The Economic Authorities Debt 41141 100.0 39320 100.0 -1821 - Net Balance of Economic Authorities with the Banking System -5983 -14.5 -10102 -25.7 -4119 - Borrowing of Economic Authorities from NIB 47124 114.5 49422 125.7 2298

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 & Public Economic Authorities

June 2002 March 2003

- 203 -

(LE mn)

End of Change +(-)

Value % Value % 2002/2003Resources: 228345 100.0 234635 100.0 6290

. Social Insurance Fund for Gov. Employees 83779 36.7 86179 36.7 2400

. Social Insurance Fund for Pub. & Priv. Sectors Employees 70879 31.0 70979 30.3 100

. Proceeds from the Investment Certificates 49008 21.5 53768 22.9 4760

. Accumulated returns of the Investment Certificates (Category A) 7417 3.2 6443 2.8 -974

. Proceeds from US dollar Development Bonds 1303 0.6 1651 0.7 348

. Post Office Savings 17109 7.5 19312 8.2 2203

. The NIB Balances held at the Banking System ( Net ) -2800 -1.2 -5385 -2.3 -2585

. Other * 1650 0.7 1688 0.7 38

Uses: 228345 100.0 234635 100.0 6290. Government 113786 49.8 119823 51.1 6037

. Economic Authorities 47124 20.7 49422 21.0 2298

. Other 67435 29.5 65390 27.9 -2045

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

- 204 -

June 2002 March 2003

(3/5) National Investment Bank

(Resources & Uses)

(L.E.mn)

July /March

2001/2002 2002/2003* Change

Value % Value % (-)

Balance of Current Account 1392.6 3734.6 2342.0

Balance of Current Account Excluding Transfers( ) (12135.9) (8785.6) 3350.3

Receipts 54127.4 100.0 66343.7 100.0 12216.3

Export proceeds** 23028.4 42.5 28805.7 43.4 5777.3

Transportation of which, 8806.9 16.3 10637.2 16.0 1830.3

Suez Canal Dues (5928.7) (11.0) (7775.5) (11.7) 1846.8

Travel 11018.1 20.4 13918.6 21.0 2900.5

Investment income 3179.5 5.9 2334.8 3.5 (844.7)

Government services 589.1 1.1 937.9 1.4 348.8

Other receipts 7505.4 13.8 9709.5 14.7 2204.1

Payments 66263.3 100.0 75129.3 100.0 8866.0

Import payments** 47401.2 71.5 54480.8 72.5 7079.6

Transportation 1382.1 2.1 1354.1 1.8 (28.0)

Travel 4112.2 6.2 5256.9 7.0 1144.7

Investment income of which, 2916.5 4.4 3307.7 4.4 391.2

Interest paid (2545.8) (3.8) (2526.1) (3.4) (19.7)

Government expenditures 2385.7 3.6 1628.1 2.2 (757.6)

Other payments 8065.6 12.2 9101.7 12.1 1036.1

Transfers 13528.5 100.0 12520.2 100.0 (1008.3)

Official net( ) 3388.1 25.0 1978.7 15.8 (1409.4)

Private net( ) 10140.4 75.0 10541.5 84.2 401.1

Preliminary figures*

Including the exports & imports of free zones**

(4/1) Balance of Payments

- 205 -

(L.E.mn)

2001/2002 2002/2003*Value Value

Capital & Financial Account -1052.9 -9785.1

Direct Investment Abroad -33.7 -128.9 Direct Investment in Egypt 1655.3 2695.8 Portfolio Investments Abroad -2.7 -67.6 Portfolio Investments in Egypt ( net) 376.1 -956.8 Other Investments (net) -3047.9 -11327.6

Net Borrowing 3404.7 -1713.8 Medium and Long -Term Loans -2217.1 -2265.6 Drawings 1221.6 2341.6

Repayments -3438.7 -4607.2

Medium - Term Suppliers Credits -80.4 -1436.0

Drawings 685.7 182.9

Repayments -766.1 -1618.9

Short - Term Suppliers Credits (net) 1670.0 4172.9

Bonds 4032.2 -2185.1

Other Assets -3618.7 -9265.0

C.B.E. -18.4 -130.0

Banks 2963.8 138.6

Other -6564.1 -9273.6

Other Liabilities -2833.9 -348.8

C.B.E. 22.7 12.6

Banks -2856.6 -361.4

Net Errors & Omissions -3462.1 5673.6

Overall Balance -3122.4 -376.9Change in Reserve Assets, Increase (-) 3122.4 376.9Source : CBE.

* Preliminary figures

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

July /March

- 206 -

(US$mn)

July /March

2001/2002 2002/2003* Change

Value % Value % (-)

Balance of Current Account 299.1 714.1 415.0

Balance of Current Account Excluding Transfers( ) (2806.0) (1870.8) 935.2

Receipts 12463.2 100.0 13652.5 100.0 1189.3

Export proceeds** 5294.2 42.5 5905.4 43.3 611.2

Transportation of which, 2023.6 16.2 2182.8 16.0 159.2

Suez Canal Dues (1363.5) (10.9) (1597.2) (11.7) 233.7

Travel 2543.6 20.4 2887.9 21.1 344.3

Investment income 737.9 5.9 478.5 3.5 (259.4)

Government services 136.8 1.1 192.0 1.4 55.2

Other receipts 1727.1 13.9 2005.9 14.7 278.8

Payments 15269.2 100.0 15523.3 100.0 254.1

Import payments** 10928.5 71.6 11241.2 72.4 312.7

Transportation 320.4 2.1 273.0 1.8 (47.4)

Travel 944.7 6.2 1085.9 7.0 141.2

Investment income of which, 666.1 4.4 680.2 4.4 14.1

Interest paid (585.0) (3.8) (517.8) (3.3) (67.2)

Government expenditures 541.6 3.5 340.5 2.2 (201.1)

Other payments 1867.9 12.2 1902.5 12.2 34.6

Transfers 3105.1 100.0 2584.9 100.0 (520.2)

Official net( ) 766.2 24.7 409.8 15.9 (356.4)

Private net( ) 2338.9 75.3 2175.1 84.1 (163.8)

Preliminary figures*

Including the exports & imports of free zones**

(4/2) Balance of Payments

- 207 -

(US$mn)

2001/2002 2002/2003*Value Value

Capital & Financial Account -94.2 -1733.1

Direct Investment Abroad -7.7 -26.9 Direct Investment in Egypt 388.1 578.1 Portfolio Investments Abroad -0.6 -13.7 Portfolio Investments in Egypt ( net) 67.3 -206.0 Other Investments (net) -541.3 -2064.6

Net Borrowing 950.8 -45.1 Medium and Long - Term Loans -503.9 -382.8 Drawings 283.0 560.7

Repayments -786.9 -943.5

Medium - Term Suppliers Credits -20.5 -275.8

Drawings 158.7 42.0

Repayments -179.2 -317.8

Short - Term Suppliers Credits (net) 375.5 886.0

Bonds 1099.7 -272.5

Other Assets -835.7 -1932.7 C.B.E. -3.4 -28.5

Banks 673.1 24.2

Other -1505.4 -1928.4

Other Liabilities -656.4 -86.8

C.B.E. 5.2 2.8

Banks -661.6 -89.6

Net Errors & Omissions -879.3 966.8

Overall Balance -674.4 -52.2Change in Reserve Assets, Increase (-) 674.4 52.2Source : CBE.

* Preliminary figures

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

July /March

- 208 -

(US$ mn)

Change(-)%Value %Value

611.2100.05905.4100.05294.2Total ****523.138.92299.633.51776.5Fuels , Mineral Oils & Products250.913.0770.39.8519.4Crude petroleum277.125.51509.323.31232.2Petroleum products ***14.70.317.00.02.3Charcoal & types thereof(19.6)0.13.00.422.6Other fuels72.82.2131.71.158.9Cotton76.23.3192.22.2116.0Raw Materials(3.8)0.01.30.15.1Potatoes0.50.15.00.14.5Citrus fruits(9.5)0.00.30.29.8Lentil(0.3)0.00.10.00.4Spices & vanilla(0.1)0.01.00.01.1Groundnuts(16.4)0.29.50.525.9Medicinal plants 4.20.15.60.01.4Flax , raw

101.62.9169.41.367.8Other 174.38.2486.45.9312.1Semi-finished Commodities28.10.738.80.210.7Carbon6.10.17.90.01.8Essentials oils & resins

- 209 -(4/3) Exports by Degree of Processing *

2002/2003 **2001/2002July / March

(US$ mn)

Change(-)%Value %Value

11.72.0115.62.0103.9Cotton yarn18.60.952.80.634.2Aluminium, not mixed4.40.741.20.736.8Animal & vegetable fats, oils and products

(9.8)0.18.20.318.0Molasses26.80.847.00.420.2Organic & inorganic chemical substances 45.32.0118.51.473.2Cast iron 43.10.956.40.313.3Other (66.3)36.82171.542.32237.8Finished Commodities(4.7)0.13.10.27.8Milk (3.3)0.00.40.13.7Preserved & dried vegetables 0.50.01.00.00.5Dried onion

(17.1)0.847.71.264.8Rice1.40.13.30.01.9Vegetables & fruits products

30.80.953.80.423.0Sugar and its products29.41.590.71.261.3Pharmaceutical products26.81.058.90.632.1Fertilizers1.01.164.21.263.2Cement(1.5)0.14.70.16.2Essentials oils & other perfumes

- 210 -

2002/2003 **2001/2002

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

July / March

(US$ mn)

Change(-)%Value %Value0.30.02.00.01.7Leather articles 1.10.18.50.17.4Rubber & articles

13.60.530.00.316.4Paper & articles16.61.059.30.842.7Sanitary fixtures of ceramic & porcelain 34.41.162.80.528.4Cars , bicycles & tractors(2.5)1.373.91.576.4Cotton textiles (17.7)0.743.11.260.8Carpets & other floor covering(0.9)0.15.50.16.4Shoes & accessories17.42.6155.62.6138.2Ready-made clothes15.01.7102.01.787.0Aluminium articles

(129.8)1.8103.54.4233.3Articles of iron and steel1.10.15.80.14.7Wooden furniture

(78.2)20.21191.724.01269.9Other(168.9)10.6624.015.0792.9Undistributed Commodities

Source: Central Bank of Egypt.* Commodities are classified according to Harmonized system.** Provisional.*** Including bunker fuel.**** Including exports of free zones.

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

2002/2003 **2001/2002July / March

(US$ mn)

Change(-)%Value%Value

312.7100.011241.2100.010928.5Total ***231.96.3704.44.3472.5Fuels, Mineral Oils & Products232.95.8651.03.8418.1Petroleum products (0.9)0.553.10.554.0Charcoal & types thereof(0.1)0.00.30.00.4Other

(407.3)17.31950.621.62357.9Raw Materials (419.3)8.8987.012.91406.3Crude petroleum71.13.5396.33.0325.2Wheat(8.5)2.5284.82.7293.3Maize4.20.114.10.19.9Sesame

(33.1)0.780.61.0113.7Tobacco3.40.03.40.00.0Iron , raw

(14.2)1.2133.71.3147.9Seeds & oil seeds(6.8)0.111.80.218.6Cotton , raw(4.1)0.438.90.443.0Other

376.629.03255.726.42879.1Intermediate Commodities(27.3)0.671.90.999.2Sugar , raw20.12.8314.12.7294.0Animal & vegetable fats , oils and products35.30.438.90.03.6Cement19.13.1348.63.0329.5Organic & inorganic chemical substances 2.90.111.50.18.6Fertilizers7.50.446.00.438.5Tanning & dyeing extracts8.02.9321.72.9313.7Plastic & articles thereof

(11.3)2.0227.32.2238.6Wood & articles

- 212 -

(4/4) Imports by Degree of Use *

July /March2002/2003**2001/2002

(US$ mn)

Change(-)%Value%Value

(14.3)2.3263.52.5277.8Paper , cardboard paper & articles thereof

53.01.7190.41.3137.4Synthetic fibers

146.65.1572.93.9426.3Iron & steel products

17.81.0107.60.889.8Rubber & articles

37.30.780.10.442.8Aluminium & articles

81.95.9661.25.3579.3Other

47.721.82456.022.02408.3Investment Goods

(43.1)1.1122.11.5165.2Pumps , fans & parts thereof

6.70.334.50.327.8Machinery, apparatus for ginning spinning & parts thereof

18.90.9105.40.886.5Computers

23.50.886.10.662.6Motors , generators , electric transformer & parts thereof

53.50.666.00.112.5Vehicles & railway trains

2.20.110.30.18.1Tractors

8.00.218.50.110.5Vehicles for persons transport

(1.0)0.02.50.03.5Vehicles for goods transport

64.72.5276.11.9211.4Spare parts for cars

19.10.558.40.439.3Air conditioning machines

2001/2002

Contd. (4/4) Imports by Degree of Use *

July / March- 213 -

2002/2003**

(US$ mn)

Change(-)%Value%Value

33.90.9102.50.668.6Self propelled bulldozers & parts18.40.441.60.223.2Agriculture machines (50.1)1.7195.32.2245.4Electric appliances for telephones & wire telegraph(198.8)4.3489.16.3687.9Other machines & electric appliances

8.40.222.00.113.6Printing machinery & parts

(14.3)1.4160.81.6175.1Optical appliances used in cinema, medicine & surgery

97.75.9664.85.2567.1Other(56.2)17.92011.318.92067.5Consumer Goods

64.95.3591.24.8526.3A - Durable Consumer Goods

6.30.552.80.446.5Refrigerators & electric freezers

5.90.335.80.329.9Televisions & parts thereof42.81.3141.10.998.3Cars9.10.561.40.552.3Elec. domestic appl. with elec. motor0.82.7300.12.7299.3Other

(121.1)12.61420.114.11541.2B - Non-durable Consumer Goods5.91.0115.31.0109.4Meat10.10.445.90.335.8Fish(6.0)0.781.10.887.1Milk & products and eggs(4.4)0.551.30.555.7Tea

(25.5)0.01.20.226.7Wheat flour

- 214 -

Contd. (4/4) Imports by Degree of Use *

July / March2002/2003**2001/2002

(US$ mn)

Change(-)%Value%Value

(61.8)3.2363.03.9424.8Pharmaceutical products(8.2)0.115.00.223.2Insecticides

(26.5)0.883.81.0110.3Remains of foodstuff industries(13.6)0.335.30.548.9Live animals(62.2)0.663.81.2126.0Ready-made clothes(9.6)0.02.80.112.4Cotton textiles40.40.779.90.439.5Refined sugar(14.6)0.111.20.225.8Lentil3.20.217.70.114.5Soap , detergents , artificial wax51.74.0452.83.7401.1Other

120.07.7863.26.8743.2Undistributed Commodities

Source: Central Bank of Egypt.* Commodities are classified according to Harmonized System.** Provisional.*** Include imports of free zones.

- 215 -

Contd. (4/4) Imports by Degree of Use *

July / March2002/2003**2001/2002

(US$ mn)

2001/20022002/2003**2001/20022002/2003**2001/2002

(5335.8)(5634.3)11241.210928.55905.45294.2Total ***

(1901.1)(2464.9)3911.94008.22010.81543.3European Union countries

(779.9)(732.3)1064.31039.4284.4307.1Other European countries

(172.1)(168.1)190.1196.318.028.2 Russian Federation & C.I.S

(638.9)(819.5)2833.02737.32194.11917.8United States of America

113.8206.4610.6519.4724.4725.8Arab countries

(1115.9)(965.9)1671.81595.0555.9629.1 Asian countries

(19.1)(58.6)74.399.655.241.0 African countries

(822.6)(631.4)885.2733.362.6101.9Other countries

Source: Central Bank of Egypt.

* Including commodity grants

** Provisional

*** Include exports & imports of free zones

- 216 -

Proceeds of exports

(4/5) Regional Distribution of Export and Import Transactions

July / March

Trade BalancePayments for Imports*

2002/2003**

(piasters)

2002 2003

End of June March

Currency Unit

US Dollar 1 450.0000 572.8360

EURO 1 443.5200 616.4861

Pound Sterling 1 686.0250 897.8059

Canadian Dollar 1 296.2475 390.2153

Danish Krone 1 59.7213 83.0317

Norwegian Krone 1 59.8086 78.1709

Swedish Krone 1 48.8759 66.9123

Swiss Franc 1 301.6086 417.3973

Japanese Yen 100 375.4693 476.6484

Source : Central Bank of Egypt.

- 217 -

(4/6) L.E.Exchange Rate Against Foreign Currencies

in the Free Market

(Transfers / Buying )

(4 / 7) External Debt * (US$ mn)Change+ (-)%Value%Value

31.6100.028692.4100.028660.8Total External Debt166.154.115502.553.515336.4Rescheduled bilateral debt **(1.7)26.07453.926.07455.6 ODA167.828.18048.627.57880.8 Non-ODA143.214.64200.414.24057.2Other bilateral debt

(180.4)11.23224.611.93405.0 Paris club countries323.63.4975.82.3652.2 Other countries233.717.24931.116.44697.4International & regional organizations94.03.51017.83.2923.8Suppliers & buyers Credits

(45.7)7.32104.37.52150.0Short term debt :(8.2)4.61330.34.71338.5Deposits ***

(37.5)2.7774.02.8811.5Other Facilities(272.5)2.4681.13.3953.6Sovereign bonds(287.2)0.9255.21.9542.4Private sector (Non guaranteed)

Source: Loans & External Debt Department- CBE.* The difference from World Bank data is in short-term debt.** According to the agreement signed with Paris club countries on 25/5/1991.*** Including Arab International Bank's deposit.

June 2002 March 2003End of

- 218 -

(5/1) Position of Egyptian Cotton

Seasons2000/2001 Change 2001/2002 Change 2002/2003 Change

PreliminaryFinal % Final % Estimates %

Cultivated area (Thousand Feddans) 518 -21.4 731 41.1 740* 1.2

Productivity (Metric Cantar/Feddan) 8.0 14.3 8.6 7.5 7.8 -9.3Crop (without scarto) 4155 -9.6 6263 50.7 5767** -7.9 Extra-long staple 620 19.5 1025 65.3 1341 30.8 Long & medium-long staple 3535 -13.3 5238 48.2 4426 -15.5Opening stock 1026 -19.0 1082 5.5 2263 109.1Total Supply 5181 -11.6 7345 41.8 8030 9.3Total Distribution 4099 -15.8 5082 24.0 6454+ 27.0

For local mills 2708 -6.2 2905 7.3 3062 5.4

Export commitments 1391 -29.7 2177 56.5 3392 55.8

Carry over stock 1082 8.7 2263 109.1 1576 -30.4

Average farm-gate price*** (LE/Cantar) 498 16.4 379 -23.9 379 -

Source: C.B.E (Alex. Branch), The Holding Company for Spinning , Weaving and Clothes , and the Ministry of Agriculture &

Lands Reclamation, the Cotton Arbitration & Testing General Organisation (CATGO).

* Preliminary Estimates by Ministry of Agriculture & Lands Reclamation.

** Preliminary Estimates by The Holding Company for Cotton, Spinning , Weaving and Clothes .

*** The average purchase rate of Giza 70 & 86 varieties. + Until 31/3/2003.

- 219 -(Thousand Metric Cantars)

(5/2) Egyptian Cotton Exports

Quantity : Thousand Metric Cantars Value : LE Million & Millions of US$

2000/2001 2001/2002 2002/2003

Quantity ValueAverage

price ValueAverage

price Quantity ValueAverage

price ValueAverage

price Quantity ValueAverage

price ValueAverage

price

LE mn (LE) US$ mn ($) LE mn (LE) US$ mn ($) LE mn (LE) US$ mn ($)

1- Repatriated Proceeds of exports Beginning of season until 31/12 49 21.3 434.7 5.9 120.4 36 17.0 472.2 4.0 111.1 104.0 41.5 399.0 9.0 86.5 Beginning of season until 31/3 234 105.4 450.4 27.8 118.8 199 92.0 462.3 20.0 100.5 475.0 204.0 429.5 40.0 84.2 Beginning of season until 30/6 516 235.0 455.4 61.5 119.2 360 161.3 448.1 35.5 98.6 .. .. .. .. .. Beginning of season until 30/9 627 286.2 456.5 74.7 119.1 560 244.3 436.3 54.0 96.4 .. .. .. .. .. Beginning of season till its end* 674 313.5 465.1 81.2 120.5 730 309.8 424.4 67.8 92.9 .. .. .. .. ..

Quantity % Quantity % Quantity %

2- Exports commitments** 1391.0 100.0 2177.0 100.0 3392.0 100.0E.U.C 454.0 32.7 565.0 26.0 762.9 22.5Germany 64.9 4.7 68.1 3.1 71.8 2.1Italy 294.7 21.2 371.4 17.1 574.3 16.9Spain 7.2 0.5 15.0 0.7 13.2 0.4France 5.5 0.4 0.5 - - -Portugal 66.1 4.8 51.3 2.4 40.7 1.2Others 15.6 1.1 58.7 2.7 62.9 1.9Other European Countries 208.6 15.0 256.2 11.7 617.5 18.2Switzerland 47.4 3.4 109.7 5.0 485.8 14.3Turkey 136.5 9.8 127.1 5.8 92.0 2.7Romania - - 0.5 - - -Czech 0.7 0.1 - - 15.9 0.5Others 24.0 1.7 18.9 0.9 23.8 0.7Asian Countries 612.3 44.0 1104.9 50.7 1647.4 48.6India 257.9 18.5 388.0 17.8 887.3 26.2Indonesia 61.4 4.4 50.4 2.3 27.5 0.8South Korea 66.0 4.8 155.4 7.1 261.7 7.7Japan 65.3 4.7 89.3 4.1 66.8 2.0Thailand 64.2 4.6 81.8 3.8 50.6 1.5Others 97.5 7.0 340.0 15.6 353.5 10.4U.S.A. 43.6 3.1 188.7 8.7 311.9 9.2Other Countries 72.5 5.2 62.2 2.9 52.3 1.5

Source: C.B.E. ( Alexandria Branch ) . * The repatriated proceeds collected by the C.B.E.** From the Beginning till the end of seasons 2000/2001 & 2001/2002and until 31/3/2003 for 2002/2003 season.

- 220 -

July/March 2000/2001 July/March 2001/2002 July/March 2002/2003Tourists % Tourist % Tourists % Tourist % Tourists % Tourist %

Nights Nights Nights

Total 4105 24830 3195 20961 4176 25112European Countries 2657 100.0 16685 100.0 1999 100.0 13318 100.0 2794 100.0 17231 100.0

East Europe 279 10.5 1198 7.2 325 16.3 1705 12.8 587 21.0 2923 17.0

West Europe 2378 89.5 15487 92.8 1674 83.7 11613 87.2 2207 79.0 14308 83.0France 260 9.8 1823 10.9 179 9.0 1369 10.3 224 8.0 1510 8.8Germany 610 23.0 4392 26.3 473 23.7 3595 27.0 530 19.0 3625 21.0Italy 527 19.8 3637 21.8 346 17.3 2379 17.9 574 20.6 3810 22.1Spain 77 2.9 612 3.7 59 2.9 384 2.9 72 2.6 567 3.3Switzerland 86 3.2 534 3.2 67 3.4 442 3.3 79 2.8 485 2.8United Kingdom 292 11.0 1561 9.4 236 11.8 1469 11.0 300 10.7 1718 10.0Other 526 19.8 2928 17.5 314 15.7 1975 14.8 428 15.3 2593 15.0The Middle East Countries 856 100.0 4815 100.0 794 100.0 4967 100.0 908 100.0 5420 100.0Jordan 60 7.0 289 6.0 62 7.8 344 6.9 66 7.3 352 6.5Kuwait 50 5.8 487 10.1 50 6.3 440 8.8 56 6.2 460 8.5Palestine 105 12.3 348 7.2 105 13.2 453 9.1 128 14.0 456 8.4Saudi Arabia 173 20.2 1527 31.7 170 21.4 1503 30.3 188 20.7 1664 30.7Syria 58 6.8 249 5.2 56 7.1 326 6.6 59 6.5 287 5.3Other 410 47.9 1915 39.8 351 44.2 1901 38.3 411 45.3 2201 40.6Source : Central Agency for Public Mobilization and Statistics.

(6/1) Number of Arrivals and Tourists Nights ( Departures) (by Group)

- 221 -

(In Thousand)

July/March 2000/2001 July/March. 2001/2002 July/March 2002/2003Tourists % Tourist % Tourists % Tourist % Tourists % Tourist %

Nights Nights Nights

African Countries 108 100.0 706 100.0 105 100.0 799 100.0 128 100.0 706 100.0South Africa 13 12.0 53 7.5 11 10.5 44 5.5 12 9.4 39 5.5Morocco 11 10.2 79 11.2 11 10.5 106 13.3 15 11.7 92 13.0Sudan 37 34.3 380 53.8 35 33.3 391 48.9 41 32.0 341 48.3Tunisia 17 15.7 64 9.1 16 15.2 79 9.9 17 13.3 77 10.9Other 30 27.8 130 18.4 32 30.5 179 22.4 43 33.6 157 22.3

Americas 244 100.0 1497 100.0 141 100.0 1011 100.0 130 100.0 843 100.0Canada 32 13.1 213 14.2 23 16.3 165 16.3 25 19.2 152 18.0United States 172 70.5 1115 74.5 97 68.8 756 74.8 89 68.5 612 72.6Latin America 40 16.4 169 11.3 21 14.9 90 8.9 16 12.3 79 9.4

Asia & Pacific 238 100.0 1119 100.0 154 100.0 856 100.0 214 100.0 903 100.0Australia 34 14.3 251 22.4 25 16.2 196 22.9 25 11.7 157 17.4Japan 75 31.5 353 31.5 29 18.8 165 19.3 49 22.9 218 24.2South Korea 27 11.3 67 6.0 15 9.7 44 5.1 23 10.8 63 7.0China 10 4.2 47 4.2 10 6.5 52 6.1 20 9.3 97 10.7India 23 9.7 101 9.0 20 13.0 95 11.1 24 11.2 87 9.6Other 69 29.0 300 26.8 55 35.7 304 35.5 73 34.1 281 31.1

Other Countries 2 - 8 - 2 - 10 - 2 - 9 -

Source : Central Agency for Public Mobilization and Statistics.

(6/1) Number of Arrivals and Tourists Nights of Departures (by Group) (Contd.) - 222 -

(In Thousand)

Number Average Number Average Number AverageStay Stay Stay

Total 3434 7.2 3018 6.9 3937 6.4

July / September 1258 7.3 1265 7.0 1427 6.9

October / December 1070 7.2 721 7.0 1287 6.3

January / March 1106 7.3 1032 6.8 1223 5.8

- 223 -

European Countries 2307 7.4 1893 7.3 2709 6.5

Middle East Countries 661 6.3 765 6.0 812 6.3

Africa 95 7.4 101 7.9 110 6.4

The Americas 184 8.1 127 8.0 122 6.9

Asia and the Pacific 185 6.0 130 6.6 181 5.0

Others 2 4.1 2 5.1 3 3.4

Source: Central Agency for Public Mobilization and Statistics(CAPMAS) .

By Group

(6/2) Number of Tourists (Departures) & Average Stay

July / March2000/2001 2001/2002 2002/2003

By Period

( In thousand)

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.