Reigning in inflation THE CENTRAL Bank of Egypt (CBE) held its first ever Monetary Policy Committee (MPC) meeting last Thursday. The MPC, which makes monetary policy decisions, will meet on the first Thursday of each month. Nine members including the governor of the CBE, the two deputy governors and six members of the CBE's board of directors make up the committee. The CBE will use the overnight deposit and lending interest rates as the ceiling and floor within which the overnight inter-bank rate will function as a mechanism called the "corridor". The MPC's task falls within the framework of the CBE's overall mission to formulate and implement monetary policy, with price stability being the primary and overriding objective. The CBE is committed to achieving, over the medium term, low rates of inflation which it believes are essential for economic growth. According to a press release issued by the CBE, "the CBE intends to put in place a formal inflation targeting framework to anchor monetary policy once the fundamental prerequisites are met." The release added that in the transition period, the CBE will meet its inflation objectives by steering short-term interest rates, keeping in view the developments in credit and money supply as well as other factors which may influence the underlying rate of inflation. According to the CBE, the annual rate of inflation declined in the first quarter of 2005 due to "the non- expansionary monetary policy adopted by the CBE, the sustainability of the new exchange rate regime that lowered inflation expectations and the decline of the international prices of commodities." Women-driven economies MORE than 150 Arab and international participants are expected to attend next week's Arab International Women's Forum (AIWF) conference on Women and Integrated Rural Development. Hosted by the Arab League, the conference is scheduled for 12-13 June. During the two days, the conference will focus on the role of women in the local economy and rural development. Six sessions will be held to discuss the status of rural women and their role in combating poverty in remote areas and will look into ways to provide rural women with better and equal educational opportunities in order to eradicate illiteracy. The conference will also discuss the issue of migration from rural areas to cities and related social and health problems. The conference falls within the framework of the AIWF's 2005 programme of Women as Engines of Economic Growth in the Arab World which was initially launched in April at the European Parliament in Brussels. AIWF was established in 2001 as a non-profit organisation in London and links Arab business and professional women in 22 Arab countries with each other and with their counterparts in the international community. Rural connectivity IN AN ATTEMPT to increase communications in rural areas, the Ministry of Communications and Information Technology (MCIT) last week announced the reduction of phone connection fees across the country to LE300 for homes down from LE500 and LE500 for businesses down from LE1,000. The initiative came after the Minister of Communications and Information Technology Tareq Kamel's visit to Sharqia to inaugurate several projects related to improving communication and postal services in the governorate, home to more than 10 per cent of Egypt's telephone users. Some of these projects involve improving telecommunications in Zaqaziq, where 66,000 new phone lines have recently been deployed at a cost of LE70 million, and another 5,000 lines are to be deployed in the near future. In addition, a telecommunications centre has been constructed to enable residents to make basic local/ long distance calls, use fax machines, and collect phone bills. Aiming to improve the telecommunications infrastructure in Egypt, the minister also inaugurated two IT clubs in both Zaqaziq and Abu Kebir bringing the total number of such clubs to 50, providing Sharqia residents with 658 computers. German support FAYZA Abul-Naga, minister of international cooperation, last week signed two agreements with German Ambassador Martin Kobler to finance development projects in Egypt. According to the agreements, Germany will provide Egypt with 79.5 million euro to finance environmental, water and social projects. The funds provided by the two agreements will be used to improve the supply of water resources, irrigation and solid waste management as well as promote small and medium sized businesses in the northern Delta. The first agreement provides 64 million euro of which 40.8 million is in the form of easy loans and 23.2 million euro is a grant. The second agreement provides 15.5 million euro for technical assistance for the construction of primary schools in rural areas. Egypt is a priority partner country for Germany's development cooperation policy. "We want to concentrate our bilateral cooperation in three fields that are of high priority for the Egyptian government -- water, environment and social market economy," Kobler said. He added that since 1973 Egypt had received approximately five billion euros from Germany in bilateral assistance, making it one of the leading recipients of German development assistance.
