IMF lauds government's policies to maintain market stability

It was not very assuring when the IMF lauded Argentina for its monetary policy just before the country went into complete financial disorder, but their comments regarding what the Egyptian Government need to do in respect of making the EP/$ rate flexible is on the money. This will not just save the central bank precious hard currency reserves but will also have a substantial impact on lifting and liberalising the Egyptian Capital Markets which many foreign Bankers found to their frustration to be overly restricted and limited due to exchange rate and hard currency constraints.

Egypt need to embrace the real idea of free capital Markets. Let the pound find its true level rather than actively trying to control it. And as many Governments have found out to their detriment, the market is always more powerful than any money you bet against it.

Analysis: S&P comments on Kuwaiti banking system

As they say sometimes, too much of a good thing can be bad for you and though S&P comments on Kuwaiti Banks are positive, they highlight the issue of over-liquidity in an overly concentrated market, something that it is typical for most GCC Banks.

What is needed is real deregulation in order to permit Banks to compete on each other�s turf and invest their excess liquidity in new markets but most urgently, the need for governments to encourage M&A activity in the GCC Banking sector and the Middle East in general. This will reduce the dependency on oil and the adverse effect that lower oil prices has on the size of non-performing loans.

Taking these increasingly urgent actions should reduce the issue of over-banking in the ME and produce strongly capitalised banks that operate on commercial grounds rather than semi-nationalistic dogma.

JPM ups Egypt bonds to overweight

The upgrade by JPM of Egyptian Bonds to overweight may finally signal the government U-turn on maintain the current, overvalued, Egyptian Pound / $ rate which has damaged the central bank reserves.

Reuters | Breaking News from Around the Globe

The U.S. military on Thursday denied rumors circulating on the foreign exchange, energy and metals markets that U.S. troops were in Iraq.

No Change to OPEC Output in 2002 If Fundamentals Remain Same: UAE
OPEC production to remain the same. Nevertheless, if agreement with Russia is not rached, prices will each new low levels as Russia does not have the strong impetus , that OPEC has, for maintaining a relatively strong oil prices.

FT.com | Tales from the heart of the Arab economies: Private-sector business people know only too well the barriers to trade and growth in the Middle East

Very interesting article about a new paper , Harnessing Trade for Development and Growth in the Middle East, by Bernard Hoekman and Patrick Messerlin, introduction by Peter Sutherland, Council on Foreign Relations Study Group for Middle East Options , which does clearly reveal the issues facing the region.