Egypt’s Supreme Council for Investments announced on May 16 a slew of incentives and administrative reforms in a bid to boost Foreign Direct Investments (FDI) as the country races to meet its commitment to the International Monetary Fund (IMF) and tackle the major shortage of hard currency. The Supreme Council for Investment, chaired by Egypt’s President Abdel Fattah El-Sisi, promulgated 22 draft resolutions that address issues foreign investors face in the local market; including easing the procedures of establishing new companies, streamlining the use of electronic signature, allowing foreigners to possess properties without limits and lowering the restrictions regarding lands…
Author: Doaa A.Moneim
On Thursday, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided to maintain current key interest rates. That said, the overnight deposit rate, overnight lending rate, main operation rate, and discount rate were kept unchanged at to 18.25%, 19.2 %, 18.75%, and 18.75% respectively. MPC attributed its decision to the ease of inflation on global and domestic levels, despite the decline in real GDP growth in the country. In this regard, MPC explained that Egypt’s real GDP growth declined to 3.9% in the fourth quarter (Q4) of 2022, down from 4.4% in Q3 of 2022, which…
Egypt is ramping up efforts to meet promises it made to the International Monetary Fund (IMF) regarding the sale of state-owned companies through the government’s initial public offering (IPO) or via assigning several companies to strategic investors under its $3 billion loan program with the fund. The North African country has less than a month to meet commitments to secure $2-2.5 billion from the sale of state-owned companies, as the first review of the loan deal is expected to be rolled out by mid-June. This has placed counted tension on a country trying to sail ashore amid a formidable economic…
In just two weeks, Egypt saw the second downgrade of its credit rating amid a troubled economy grappled with soaring inflation and a severely weakened currency. Credit rating downgrade On Friday, one of the major global credit rating agencies, Fitch Ratings, revised Egypt’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B’ from ‘B+’, switching its outlook to Negative. This is the first downgrade Fitch applies in almost a decade. Prior to that, Standard & Poor’s (S&P) revised Egypt’s credit outlook from stable to negative in April and affirmed the country’s ‘B/B’ long and short-term foreign and local currency sovereign credit…
Egypt is currently struggling to fulfill the commitments it pledged to the International Monetary Fund (IMF) under the Fund’s Extended Fund Facility (EFF) program it had approved for the country in December 2022 amid various economic challenges faced by the North-African country. “Egypt has to do more in terms of the reforms it commits under the loan program. The private sector must play a greater role, the local currency must be liberalized more and the interest rates must be further flexible. These are key challenges Egypt needs to navigate on its way to the first review. What has been done…
Multiple private banks in Egypt, including Commercial International Bank (CIB), QNB Al Ahli, and Arab Investment Bank (AIB), have issued three-year Certificates of Deposit (CDs) with yields ranging between 19% and 22%, as a bid to absorb liquidity from the local market to tame inflation. The CDs are offered with various maturities and disbursement plans. Egypt, which is suffering a shortage in the US dollar liquidity and a $17 billion financing gap through the second half of FY2026/2027, has been taking several actions to curb elevating inflation. The North-African country has devaluated the local currency, continuously raised key interest rates,…
The Egyptian pound is expected to further slump against the US dollar, crossing the 35-threshold throughout April, amid a notable activity of the hard currency in the parallel market, two experts told Business Monthly. The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) raised last week key interest rates by 2% (200 bps) to 18.25%, 19.25%, 18.75%, and 18.75% for overnight deposit rate, overnight lending rate, main operation rate, and discount rate, respectively. The action, which meant to curb the elevating inflation, came amid wide expectations that the CBE could introduce more devaluation to the Egyptian pound…
The International Monetary Fund (IMF) will conduct its first review of Egypt’s Extended Fund Facility (EFF) loan program on Wednesday, March 15, 2023. If the Fund’s executive board approves the review’s results, Egypt would receive the second tranche of the $3 billion loan set under the program. This tranche brings the total amount Egypt would receive to $750 million, the amount the IMF set for Egypt to receive in the current FY2022/2023 that ends by June-end. Business Monthly sheds light on the most crucial actions Egypt has taken since the IMF approved the EFF loan program in December 2022, and…
Recent fuel price hikes implemented in Egypt may contribute to a rise in inflation starting in June when the North African country’s current fiscal year comes to an end. Egypt’s Fuel Automatic Pricing Committee (FAPC) raised early March fuel prices for various types of octanes between EGP 0.75 and EGP 1 per liter (7%-10%) while keeping the price of diesel stable. The committee said the action comes amid global oil and gas price fluctuations. Global oil prices have been fluctuating before trading at $85.83 per barrel for Brent Crude and about $3 per Metric Million British Thermal Unit (MMBtu) for…
Egypt is set to embark on its initial public offering (IPO) program in March, a decision that experts described as positive for the economy in general, yet came amid tough economic challenges and fluctuating stock markets. IMF deal Under the 46-month deal with the International Monetary Fund (IMF), which came into effect in late December, Egypt’s government pledged to slow down the implementation of public investment projects, including national projects in order to ease pressures on the foreign exchange market and curb inflation. Moreover, Egypt’s government also vowed to boost the role of the private sector in economic activity and…