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- October 19, 202616°
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- USD49.45+0.05%
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- INTEREST37.00%-1.00
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- October 19, 202616°
Egypt rejects proposal to transfer Suez Canal in exchange for debt
Egypt’s Cabinet deemed it unacceptable to transfer state assets, including the Suez Canal, in exchange for domestic debt. The Cabinet said the canal would not be subject to a swap, pledge or transfer of ownership, and that the proposal was not government policy.
Egypt’s Cabinet opposed the idea of transferring some state assets, including the Suez Canal, in exchange for part of the domestic debt. The Cabinet said the method was unacceptable and would not be implemented.
The decision was announced after Hassan Heikal, one of the prime minister’s advisers, proposed on Saturday swapping state assets for debt. Heikal’s proposal included transferring stakes in public companies or assets such as the Suez Canal to the Central Bank of Egypt in exchange for settling part of the government’s domestic debt.
The government’s approach to public debt
The Cabinet said transferring assets and liabilities between state institutions would not automatically reduce the government’s total obligations. It said the management of public debt must take into account the debt structure, the cost of debt servicing, domestic liquidity, and the effects on monetary and fiscal policy together.
The statement said the idea reflected Hassan Heikal’s personal view and did not represent any policy or mechanism adopted by the Egyptian government.
The status of the Suez Canal
Egypt’s Cabinet stressed that the Suez Canal was not among the assets included in the proposal and that the government had no plan to swap the canal for debt, pledge it or transfer its ownership.
The Cabinet said the canal was directly linked to Egypt’s national security and sovereignty. The statement also said the Suez Canal played a central role in the country’s economy and global trade.
The National Media Authority’s debts
The Egyptian government announced on Thursday that an agreement had been signed to settle 88.3 billion Egyptian pounds of the debts owed by the National Media Authority, formerly known as Maspero, to the National Investment Bank.
The details of the agreement and which assets were used in the settlement were not disclosed. It was stated that the amount was calculated using an exchange rate of approximately 50 Egyptian pounds to the dollar.
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