Egypt is grappling with a severe shortage of US dollars, prompting the government to devise a plan to attract $191 billion in greenback liquidity by 2026. However, experts face a challenge in proposing innovative solutions due to a lack of clear data on Egypt’s current US dollar reserves. Despite this, recent measures have shown promise, but they are not enough to solve the multidimensional challenge. In the following article, Business Monthly engages with experts to explore innovative ideas that the Egyptian government could employ to achieve its goal and address the serious shortage of US dollars. Data dilemma: key to…
Author: Doaa A.Moneim
Egypt is facing profound economic challenges in the current fiscal year 2023/2024 (July 2023-June 2024) due to the lingering repercussions of the European geopolitical crisis that erupted 18 months ago. These economic difficulties are hindering the country’s ability to fulfill its commitments under the $3 billion loan agreement with the International Monetary Fund (IMF) and intensifying pressures related to the ongoing significant US dollar shortage, soaring inflation, and declining Foreign Direct Investments (FDIs). As outlined in the EGP 3 trillion FY2023/2024 plan, the government has revised its projection for real GDP growth from 5% to 4.1%. The plan aims for…
Amid economic turbulence, Egypt’s real estate sector has emerged as both a refuge and a battlefield. Driven by the need to hedge against financial uncertainties, demand for properties has surged, while developers grapple with an intricate web of challenges, including multiple currency devaluations and a foreign currency crunch. Property ownership surge in Q1 2023 A recent report by Property Finder in July reveals a marked upswing in property ownership demand for the first quarter of 2023, attributed to the local currency’s depreciation and subsequent construction cost escalation. The realm of residential and mixed-use real estate shows a total of 522…
Egypt’s efforts to combat its nearly year-and-a-half US dollar shortage through the issuance of US dollar-denominated certificates of deposit (CDs) have been seen as a positive move. However, experts, speaking to Business Monthly, suggest that more action may be required to fully resolve the issue. The scarcity of US dollars has been a persistent challenge for the country, prompting authorities to explore additional measures to address the situation. In July, two state-owned banks in Egypt, the National Bank of Egypt (NBE) and Banque Misr, issued US dollar-denominated certificates of deposit (CDs) with a three-year maturity and an annual yield of…
Egypt’s investment climate currently faces numerous challenges that have deterred potential investors including a shortage of US dollars, hot money outflow, a weak local currency, high inflation, and substantial government debt. According to the IMF, Egypt’s government gross debt is projected to reach 92.9% of GDP by 2023, the highest among emerging markets and middle-income countries at 88.5%. Ahmed Elmestkawy, senior economist at the General Authority for Investment and Free Zones (GAFI), highlighted to Business Monthly significant hurdles for the private sector in Egypt like the volatile foreign exchange market, difficulties in importing machinery and raw materials, and challenges in…
The Egyptian gold market has been undergoing significant changes over the past year and a half, witnessing fluctuations in supply and demand. As global challenges escalate due to the aftermath of the Russian-Ukrainian conflict, Egyptians seek safe havens for their money, increasing interest in gold. For months, gold prices in Egypt reached unprecedented levels, driven by high demand amid the decline of the Egyptian pound against the US dollar. However, since June 13, a drop in gold prices has been observed, with a slight upturn during the current week. This trend contrasts with the global market, where gold prices increased…
After months of anticipation, the Egyptian government has finally provided an update on its progress regarding implementing the initial public offering (IPO) program. This program is a crucial commitment under the challenging loan deal with the International Monetary Fund (IMF). However, experts believe that while the government’s recent actions send positive messages to investors, they will not have a tangible impact on addressing the challenges the local market faces in the short or medium term. Measuring progress Hany Abou El-Fotouh, a banking expert and CEO of Alraya Consulting, told Business Monthly that the government’s signing of contracts with the private…
Egypt’s loan deal with the International Monetary Fund (IMF) has hit a roadblock, as both sides remain silent on the progress of the loan program’s review since its approval in December, posing significant challenges for the ongoing agreement. Uncertain progress casts doubt The initial review of Egypt’s loan deal, which was scheduled for March 15 and then rescheduled to June 30, has been postponed to an undisclosed date. Meanwhile, the second review is currently slated for completion in September. Business Monthly consulted experts who outlined various potential scenarios regarding the future of Egypt’s loan deal. The deal, which was approved…
US firms are currently exploring various roads of collaboration with Egypt in the realm of Sustainable Aviation Fuel (SAF) production, Minister Counsellor of Commercial Affairs at the US Embassy in Cairo Keith Kirkham said at a panel discussion co-organized by the US Commercial Service of the US Department of Commerce and the US Embassy in Cairo on June 15. Kirkham emphasized that companies are now ready to commit to partnerships with both Egypt’s private and public sectors to advance SAF initiatives in Egypt and the Middle East and North Africa (MENA) region. SAF production has now become the fresh ground…
Estimating the fair value of the Egyptian pound against the US dollar or forecasting its short-term performance has proved challenging for both experts and international financial institutions. Business Monthly got in touch with over 10 banking experts and analysts from international financial institutions in an attempt to uncover the Egyptian pound’s fair rate against the greenback amid ongoing debates over its performance and the anticipated fourth wave of currency devaluation. Experts reached a consensus that it’s impossible to estimate the fair price of the Egyptian pound, at the present or even over the short term. Since March 2022 and through…