Egyptian Investment Minister Mahmoud Mohieldin announced on Monday that the Dubai debt crisis would have a limited effect on the Egyptian economy, which he said had no direct exposure to Dubai World debt
Egypt’s stock market recorded its biggest daily loss in 13 months on Monday, the first day of trading after Dubai’s call last week for a delay in repaying billions of dollars in debt. Dubai’s announcement had spooked global markets.
Analysts also said that they believed Egypt, which has emerged from the world financial crisis relatively unscathed, would be little affected by the Dubai debt fallout and that the decline in share prices would be short lived.
Mohieldin said that “The direct effect on the Egyptian economy is expected to be limited … The Egyptian economy and Egyptian institutions are not directly exposed to the debt of Dubai World”
The minister’s statement was released after he met the heads of Egypt’s stock exchange, the General Authority for Free Zones and Investment and the Egyptian Financial Services Authority to discuss the crisis.
“The market of course will crash, because Egypt tends to follow and it’s gotten much closer to the US index,” said Mark Rorison, head of research at Egypt’s CI Capital.
