Egypt Struggling to Pay for Energy Imports, CBE Governor Denies

Egypt Struggling to Pay for Energy Imports, CBE Governor Denies

Egypt is having difficulty paying for energy imports priced in US dollars – cancelling orders and asking for extensions – as the country’s foreign currency reserves have fallen, Reuters reports.

Tourism, a key source of foreign currency for Egypt, has declined since 2011 and has been hastened by the Russian airline crash in October. Further, low oil prices have limited aid from Egypt’s key benefactors in the Persian Gulf. Energy imports have become increasingly important for Egypt to meet its domestic needs – the country imports between $20m and $25m per month in LNG, largely to provide electricity and support industry.

Sources told Reuters that Egypt asked LNG suppliers for a 90-day payment extension, surpassing its 15-day contractual obligation. A source in the report stated that Egypt currently owes around $350m to LNG suppliers and it has cancelled six gas oil shipments scheduled for early January due to an inability to pay.

In response to media reports about Egypt’s worsening foreign currency problems, Central Bank of Egypt’s (CBE) Governor, Tarek Amer denied the allegations, reports Daily News Egypt. In a press conference, Amer called the reports “inaccurate” and said that Egypt would overcome its foreign exchange crisis again.

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