Egypt's Efforts to Stabilize Economy
The Central Bank of Egypt (CBE) is taking proactive measures to stabilize the country's teetering economy. In a recent move, the CBE conducted an auction for dollar-denominated treasury bills (TB) worth $1 billion. This auction is aimed at easing pressure on Egypt's foreign exchange reserves and supporting the Egyptian pound.
Previous Measures and Challenges
Prior to this auction, the CBE had already sold over $850 million worth of one-year TBs in December 2023. However, despite these efforts, the Egyptian pound continues to face challenges.
Raising Interest Rates
In an attempt to curb inflation and stabilize the economy, the CBE increased overnight interest rates by 200 basis points. This resulted in a lending rate of 22.25% and a deposit rate of 21.25%. The CBE's efforts have shown some success, as Egypt's headline inflation rate has declined to 33.7%.
Exchange Rate Situation
Reports indicate that the pound's parallel market exchange rate against the US dollar briefly reached a record low of EGP75 for every dollar. However, the currency's official exchange rate remains at EGP31:USD1.
The IMF Agreement
The recent news of a funding agreement between Egypt and the International Monetary Fund (IMF) has brought hope for the country's economic recovery. It is believed that the pound's resurgence, with a nearly 40% gain against the dollar, is due to the expanded scope of Egypt's program with the IMF, which has increased from $3 billion to $10 billion.
Critics and Concerns
Despite the positive developments, critics like Steve Hanke, a professor at Johns Hopkins University, remain skeptical about Egypt's prospects. Hanke points to Egypt's high inflation rate, which he estimates at 139%, and the country's high debt as reasons for his concerns.
What are your thoughts on Egypt's efforts to stabilize its economy? Share your opinions in the comments below.
Frequently Asked Questions
How do you withdraw from an IRA that holds precious metals?
First decide if your IRA account allows you to withdraw funds. Make sure you have enough cash in your account to cover any fees, penalties, or charges that may be associated with withdrawing money from an IRA.
A taxable brokerage account is a better option than an IRA if you are prepared to pay a penalty for early withdrawals. If you decide to go with this option, you will need to take into account the taxes due on the amount you withdraw.
Next, you'll need to figure out how much money you will take out of your IRA. The calculation is influenced by several factors such as your age at withdrawal, the length of time you have owned the account and whether or not you plan to continue contributing to retirement plans.
Once you know how much of your total savings to convert to cash, it's time to choose the type of IRA that you want. Traditional IRAs allow you to withdraw funds tax-free when you turn 59 1/2 while Roth IRAs charge income taxes upfront but let you access those earnings later without paying additional taxes.
Once these calculations have been completed you will need to open an account with a brokerage. Many brokers offer signup bonuses or other promotions to encourage people to open accounts. To avoid unnecessary fees, however, try opening an account using a debit card rather than a credit card.
When you finally get around to making withdrawals from your precious metal IRA, you'll need a safe place where you can store your coins. Some storage facilities can accept bullion bar, while others require you buy individual coins. Either way, you'll need to weigh the pros and cons of each before choosing one.
For example, storing bullion bars requires less space because you aren't dealing with individual coins. You will need to count each coin individually. However, individual coins can be stored to make it easy to track their value.
Some prefer to keep their money in a vault. Others prefer to store their coins in a vault. Whichever method you choose, make sure you store your bullion safely so you can enjoy its benefits for years to come.
Should You Invest Gold in Retirement?
The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. Consider investing in both.
Not only is it a safe investment but gold can also provide potential returns. Retirees will find it an attractive investment.
Most investments have fixed returns, but gold's volatility is what makes it unique. This causes its value to fluctuate over time.
This does not mean you shouldn’t invest in gold. You should just factor the fluctuations into any overall portfolio.
Another advantage to gold is that it can be used as a tangible asset. Gold is less difficult to store than stocks or bonds. It can also be carried.
You can always access your gold if it is stored in a secure place. There are no storage charges for holding physical gold.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold usually rises when stocks fall.
Gold investment has another advantage: You can sell it anytime. You can also liquidate your gold position at any time you need cash, just like stocks. You don't even have to wait until you retire.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
Don't buy too many at once. Start with a few ounces. Continue adding more as necessary.
Remember, the goal here isn't to get rich quickly. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
Gold may not be the most attractive investment, but it could be a great complement to any retirement strategy.
Is buying gold a good option for retirement planning?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
Physical bullion bars are the most popular way to invest in gold. There are many ways to invest your gold. It's best to thoroughly research all options before you make a decision.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. If you need cash flow from an investment, purchasing gold stocks is a good choice.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs usually include stocks of precious metals refiners or gold miners.
How Much of Your IRA Should Be Made Up Of Precious Metals
It's important to understand that precious metals aren't only for wealthy people. It doesn't matter how rich you are to invest in precious metals. There are many ways that you can make money with gold and silver investments, even if you don't have much money.
You could also consider buying physical coins like bullion bars, rounds or bullion bars. Shares in precious metals-producing companies could be an option. You might also want to use an IRA rollover program offered through your retirement plan provider.
You will still reap the benefits of owning precious metals, regardless of which option you choose. They are not stocks but offer long-term growth.
Their prices are more volatile than traditional investments. If you decide to sell your investment, you will likely make more than with traditional investments.
Can I keep physical gold in an IRA?
Gold is money, not just paper currency or coinage. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.
Today, many Americans invest in precious metals such as gold and silver rather than stocks and bonds. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.
Gold has historically performed better during financial panics than other assets. Between August 2011 and early 2013 gold prices soared nearly 100 percent, while the S&P 500 plunged 21 percent. Gold was one of the few assets that performed better than stocks during turbulent market conditions.
The best thing about gold investing is the fact that there's virtually no counterparty risk. Your shares will still be yours even if your stock portfolio drops. If you have gold, it will still be worth your shares even if the company in which you invested defaults on its debt.
Finally, gold is liquid. This allows you to sell your gold whenever you want, unlike many other investments. The liquidity of gold makes it a good investment. This allows for you to benefit from the short-term fluctuations of the gold market.
Statistics
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
irs.gov
cftc.gov
bbb.org
forbes.com
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
Tips to Invest in Gold
Investing in Gold remains one of the most preferred investment strategies. This is because there are many benefits if you choose to invest in gold. There are many options for investing in gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
Before buying any type gold, it is important to think about these things.
- First, you must check whether your country allows you to own gold. If so, then you can proceed. If not, you may want to consider purchasing gold from overseas.
- Second, it is important to know which type of gold coin you are looking for. You can go for yellow gold, white gold, rose gold, etc.
- Thirdly, it is important to take into account the gold price. It is best to start small and work your way up. You should diversify your portfolio when buying gold. Diversifying your portfolio includes stocks, bonds, mutual funds, real estate, commodities, and mutual funds.
- Remember that gold prices are subject to change regularly. Be aware of the current trends.
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By: Terence Zimwara
Title: Egypt Takes Steps to Stabilize Economy with $1 Billion Treasury Bill Auction
Sourced From: news.bitcoin.com/egypt-aims-to-ease-pressure-on-forex-reserves-via-1-billion-treasury-bill-auction/
Published Date: Tue, 06 Feb 2024 10:00:57 +0000
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