Egypt has signed insurance contracts with two global banks to hedge against fluctuating global oil prices, a senior government official told Reuters on Tuesday.
Egypt has estimated an average oil price of $67 per barrel in its full-year 2018-2019 budget while the current price of Brent crude is $79.
“We have signed insurance contracts against fluctuating global oil prices with two international banks,” said the official, who spoke on condition of anonymity.
“But we have not determined when the insurance will start,” the official said, without disclosing the names of the banks.
In April, the Finance Ministry estimated that a rise of $1 per barrel would have a negative impact of about 4 billion pounds, or 0.08 percent of GDP.
The total target deficit is 8.4 percent in 2018-2019 at 438.594 billion pounds ($24.5 billion), compared with 9.8 percent to 431.081 billion pounds in 2017-2018.