* Leading ministers expected to stay in their posts
* Tough measures likely for repairing economy
* Sisi sought strong mandate but turnout less than expected
* Sisi will have 1-year honeymoon to tackle problems-analyst
(Adds Sisi's meeting with central bank governor in 11th
By Stephen Kalin
CAIRO, June 9 Newly inaugurated President Abdel
Fattah al-Sisi reappointed Egypt's prime minister on Monday,
signalling continuity as he sets out to fix the economy and
overcome political divisions after a long period of turmoil and
In comments carried by the state news agency, Prime Minister
Ibrahim Mehleb said the current government would stay on in a
caretaker role until he forms a new cabinet. Consultations had
not yet begun, he said, although officials have said many of the
leading ministers such as finance are likely to be unchanged.
Sisi, who as armed forces chief toppled Islamist President
Mohamed Mursi last July following mass protests, was sworn in on
Sunday in a ceremony with low-key attendance by Western allies
concerned by a crackdown on dissent.
While Sisi quit the military in March, a lower-than-expected
turnout in last month's presidential elections fell short of
giving him a strong mandate to take tough measures to repair an
economy wounded by three years of instability and regular
violence which has scared away foreign investors and tourists.
Keeping the main ministers in place could allow Sisi to
implement quickly the kind of reforms that the United Arab
Emirates - one of the Gulf Arab states that gave Egypt billions
of dollars in aid after Mursi's fall - has been encouraging.
Fawaz Gerges, Professor of Middle East Studies at the London
School of Economics, said Sisi had to tackle the problems that
are undermining Egyptians' living standards and state finances.
"He knows that he has a one year honeymoon and that's why he
has to deliver in terms of jobs, in terms of lowering inflation,
in terms of the debt," he said. "That's why he's keeping Mehleb
in place and that's why he's keeping the major portfolios."
One of the most important figures in Egypt's drive to
resuscitate the economy is Finance Minister Hany Kadry Dimian,
who is expected to stay on in the new administration.
Educated at Columbia University in the United States, he was
described by a senior European diplomat as the only ministry
expert able to deal professionally with the International
Monetary Fund during a failed attempt under Mursi to secure a
$4.8 billion loan.
Reuters reported on Friday that Western consultants were
advising Egypt's government - apparently with Sisi's blessing -
on an economic reform plan which could serve as a basis for
restarting talks on a IMF loan deal.
Sisi has consulted a number of international figures in
economics and business including Saudi billionaire Prince
Alwaleed bin Talal. One of his first meetings as president was
with Central Bank Governor Hisham Ramez on Monday. They
discussed ways to increase foreign exchange reserves and
policies to ensure the stability of the Egyptian pound, the
state news agency reported.
Reserves were at $17.284 billion at the end of last month,
up from a critical low of $13.5 billion last year thanks to the
Gulf aid but well down from $36 billion before a revolt that
toppled President Hosni Mubarak in 2011.
The driving force behind the consulting project is the UAE,
which along with Saudi Arabia and Kuwait has showered Egypt with
aid totalling more than $12 billion in cash and petroleum
products since Mursi's removal.
As de facto ruler since last summer, Sisi has driven Mursi's
Muslim Brotherhood underground with a crackdown in which
hundreds of its supporters have been killed and thousands
jailed, polarising the most populous Arab nation.
However, Egypt's oldest and best organised Islamist movement
has survived official repression for decades. Sisi also faces a
violent threat from militants based in the Sinai peninsula who
are believed to have access to weapons smuggled from chaotic
Libya. These have stepped up attacks on police and soldiers
since Sisi ousted Mursi.
Mehleb, 65, was appointed prime minister in February after
serving previously in housing portfolio. A civil engineer, he is
a former chairman of Arab Contractors, one of the region's
largest construction companies, and worked briefly in Saudi
Arabia before joining the government following Mursi's
The Egyptian pound strengthened slightly at a central bank
sale on Monday to 7.1402 pounds to the dollar from 7.1403
at its last sale on Thursday, and it remained steady on the
The gap between the pound's rates on the official and black
markets has narrowed markedly since Sisi's election, with the
currency appreciating markedly against the dollar at unofficial
Egypt's benchmark stock index closed up 1.1
(Reporting by Stephen Kalin and Shadia Nasralla; Writing by
Michael Georgy; editing by David Stamp)