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The E-Sylum:  Volume 9, Number 36, September 3, 2006, Article 14

FORMER MINT DIRECTOR PHILLIP DEIHL TURNS UP IN EGYPT

Former U.S. Mint Director Phillip Diehl is now with the public
relations firm Fleishman-Hillard, working in Cairo. He was interviewed
last year for an article which appeared online just recently.  Here
are a few excerpts:

"As anyone who has failed to empty his or her pockets at the end of
the day knows, Egyptian banknotes will not survive a trip through
the wash. In an effort to increase the availability of small change,
the government is promising to make us all hear our pocket change
jingling, instead of tearing, by next summer.

Many problems plague Egyptian currency in circulation, including
the quality and abuse of banknotes. In keeping with the trend in
many Western countries to turn smaller denomination bills into coins,
the Ministry of Finance and the Central Bank of Egypt (CBE) have held
lengthy talks over the last year to hammer out an agreement on issuing
brand new LE 1 and 50 piastre coins, scheduled to be released into
circulation sometime in the middle of next year."

"After the introduction of the new coins, the Ministry of Finance
and the CBE will take old, unfit banknotes out of circulation to be
shredded or burned.

“We are continuing, however, with the production of banknotes
[including those in small denominations] for a while to come — until
the market accepts the idea of coins — at which point we will switch
to coins,” explains Afifi. “This will happen gradually by taking the
old notes out and putting the new coins in, and so on.”

Philip Diehl, senior vice-president and partner at Fleishman-Hillard
Cairo, the firm responsible for aiding the General Authority for Free
Zones and Investment in promoting Egypt as an investment destination,
is also a former director of the US mint under President Clinton.

“One crucial way to break people from using bills is to remove bills
from the market and, in a sense, they will have to be forced into it,”
Diehl says. “Also it’s very important to educate the public about the
new coins.”

It will probably not be an easy task to persuade paper-oriented Egyptians
to let go of their familiar currency for the more burdensome, heavy coins.
Diehl says it’s a necessary step as coins have a circulation life of 20
to 25 years, as opposed to the short-lived six-to-12-month life of a
banknote."

"In light of these changes, the Ministry of Finance is also rethinking
the circulation of five and 10 piastre banknotes. Inflation has made them
of relatively little use, but they remain expensive to make. While those
still in circulation will remain valid, five and 10 piastre notes are no
longer being printed. The 25-piastre bill will still be in circulation
alongside the 25-piastre coins and follow a similar process of coin
integration and gradual banknote retrieval."

To read the complete article, see: Full Story

  Wayne Homren, Editor

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