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Egyptians Rally in Cairo as Suleiman Pledges Change

Tens of thousands of Egyptian protesters filled Cairo’s Tahrir Square, with many setting up makeshift camps before dusk, as Vice President Omar Suleiman sought to convince demonstrators that the government is serious about moving toward democracy and stabilizing the economy.

Suleiman said a committee would begin work today on redrafting the constitution, following two days of negotiations with opposition leaders in which he promised wider press freedom and said he would to produce a checklist of measures needed to hold free elections. Demonstrators calling for the ouster of President Hosni Mubarak were joined in central Cairo by Google Inc. executive Wael Ghonim, who was released yesterday after being detained during a protest last week.

“There needs to be credibility and good intentions to engage these youths in a dialogue,” Naguib Sawiris, chairman of Orascom Telecom Holding SAE and a participant in the talks with Suleiman, said in a telephone interview after Ghonim’s release. “The regime must understand that it has to pick one of two options: Attack and arrest the people or engage them in a dialogue. It cannot have both.”

As dusk approached, Tahrir Square was tightly packed with demonstrators, it taking about 45 minutes to walk through the throng from one side of the area to the other. The rallies remained peaceful after clashes last week in which the United Nations said as many as 300 people died.

Photographer: Cris Bouroncle/AFP/Getty Images

Egyptian Vice President Omar Suleiman. Close

Egyptian Vice President Omar Suleiman.

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Photographer: Cris Bouroncle/AFP/Getty Images

Egyptian Vice President Omar Suleiman.

Army Presence

“I’m not a hero. You’re all heroes, the martyrs who have died in the struggle are the real heroes,” Ghonim said, addressing the crowd from a stage. His last remark prompted cheers from protesters. Pictures of those killed in the unrest have been posted around the square. Tanks and armored personnel carriers were stationed outside Tahrir late yesterday, guarding the nearby government radio and television building and a bridge that overlooks the square.

Protests were also reported today in Alexandria, Sohag, El- Arish, Ismailia, Suez, Port Said, Mahalla, Beheira, Dakhalia and Beni Suef.

The central bank intervened in financial markets today, buying pounds to halt a decline in the currency after the mass demonstrations that began on Jan. 25. The pound rose 1.3 percent, paring most of its loss in the previous two days after the banking system reopened. Suleiman’s negotiations have also helped bring down Egypt’s bond yields and the price of insuring its debt.

Business Returns

“We’ve seen things stabilize this week after last week’s major shake-up, in terms of banks coming back, violence settling down and politics starting to take shape,” said Ashraf Gamal, an associate professor of economics at Cairo University. “But until we see the government in place and changes start to get implemented, we will be stuck in this gray area.”

Suleiman met with Egyptian media chiefs today, after international condemnation of violence against local and foreign journalists last week during clashes between Mubarak supporters and the opposition.

Mubarak’s declaration on Feb. 1 that he will step down later this year failed to halt the protests. Two days earlier, the president had appointed Suleiman, 74, as the first vice president since he came to power in 1981.

General Mourad Muwafi was appointed head of the country’s intelligence service, replacing Suleiman, the state-run Middle East News Agency reported today.

Reduced Risk

The start of talks between the government and the opposition has helped cut Egypt’s credit risk to the lowest level since the protests began. The cost of insuring debt fell 5 basis points to 340 at 4:30 p.m. in London, according to CMA prices. The yield on Egypt’s dollar bonds due in 2020 rose 5 basis points to 6.26 percent, after reaching a record 7.2 percent on Jan. 31. The stock market is due to reopen on Feb. 13 and the bourse said today that sessions will be curtailed by an hour.

Other signs of a return toward normality in the country include the gradual reopening of a financial system that was closed all last week.

Citigroup Inc. restored services at branches and automated teller machines in the country, said Alberto Verme, the bank’s co-chief executive officer for Europe, the Middle East and Africa. Bank withdrawals in Egypt are stable, Verme said at a conference in Qatar today.

The uprising against a key U.S. ally pushed oil prices higher and drove the Egyptian pound to a six-year low before the central bank’s purchases. Oil fluctuated near a one-week low in New York, with crude falling as much as 1.8 percent before paring declines. Oil for March delivery fell 29 cents, or 0.3 percent, to $87.19 a barrel at 11:06 a.m. on the New York Mercantile Exchange. Futures have risen 21 percent in the past year.

‘Making Progress’

President Barack Obama said yesterday Egypt is “making progress” in negotiating an end to the standoff.

Mubarak ordered that anti-government protesters should not face criminal charges, Suleiman said in an address aired on state television. The president said “the youths of Egypt deserve the appreciation of the country,” according to Suleiman.

Low wages, high unemployment and rising food prices have been among grievances cited by protesters in Egypt, the most populous Arab country.

Food costs have come down after a jump during the rallies of last week. The price for 1 kilogram (2.2 pounds) of cucumbers at Cairo’s Embaba street market was 3 pounds ($0.51) today, compared with a high 5 pounds last week. Potatoes cost 2.5 pounds, down from 4 pounds, and green beans fell by half to 5 pounds.

Economic Growth

The economy probably grew 6.2 percent in the last quarter of 2010, according to official estimates, up from 5.5 percent the previous three months. The government says it needs growth of at least 7 percent to create enough jobs every year for a growing working-age population.

Mubarak’s regime has cooperated with Israel to impose a blockade on the Gaza Strip and helped U.S. efforts to rally Arab support against Iran’s nuclear program. Egypt and Jordan are the only two Arab states to have signed peace treaties with Israel.

Anti-government protests have rocked the Arab world in recent weeks as citizens demand higher living standards and an end to repression and corruption. A revolt in Tunisia toppled President Zine El Abidine Ben Ali, Jordan’s King Abdullah replaced the prime minister and asked him to form a new government, and demonstrations took place in Algeria and Yemen.

To contact the reporters on this story: Vivian Salama in Dubai at vsalama@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.

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