Inflation figures will be out today, and is predicted inflation will record around 38% in September

Newsletter

10 Oct 2023

Inflation figures will be out today, and is predicted inflation will record around 38% in September. Annual urban inflation has been accelerating for the past several months, hitting an all-time high of 37.4% in August. Also, the IMF’s World Economic Outlook is due out tomorrow — we’ll be looking for the institution’s Egypt growth forecast. The fund in July said it saw growth slowing to 3.7% this year from 6.6% in 2022, before inching up to 4.1% in 2024. Both the European Bank for Reconstruction and Development and commercial lender Intesa Sanpaolo have trimmed their Egypt growth forecasts this month. The World Bank, meanwhile, expects economic growth to slow to 3.7% in the current fiscal year, down from a projected 4.2% in FY 2022-2023. (CNBC Arabia)

CBE directs banks to suspend debit card use in foreign currencies abroad.
The Central Bank of Egypt (CBE) has directed the banks operating in Egypt to halt the use of EGP debit cards abroad for foreign currency withdrawal or payment transactions for an undetermined period. The CBE’s decision came on the back of the persisting shortage of foreign currency and customers' misuse of debit cards abroad. Earlier in October, the Arab African International Bank (AAIB) and Arab International Bank reportedly suspended the use of Egyptian pound debit cards abroad for foreign currency withdrawal or payment transactions amid the current foreign exchange liquidity crunch. (Asharq Business)
CBE instructed banks to start blocking use of EGP debit cards for FX transactions.
Local banks have reportedly received verbal instructions from the Central Bank of Egypt (CBE) to begin banning their clients from making FX-denominated purchases or withdrawals using debit cards linked to EGP accounts. The instructions came as our FX shortage continues to bite, and as the CBE looks to clamp down on some customers overusing debit cards in international transactions. A handful of banks have already announced the ban. (Asharq Business)
The IMF and the World Bank started their annual meeting in Morocco yesterday,
a week of talks that will likely serve as the backdrop to ongoing negotiations over the future of Egypt’s 3 billion USD loan program. Devaluation will once again be on the agenda for policymakers, with IMF head Kristalina Georgieva last week warning that the further down the road we kick the decision, the more we will “bleed” our reserves. The IMF boss told Bloomberg last week that Egypt and the Fund are “making progress” on the twice-delayed review of our 3 billion USD assistance program. (Ahram Online)
Parliament to discuss draft law on customs-free car imports for Egyptians abroad.
The Egyptian Planning and Budget Committee of the House of Representatives has approved referring the draft law enabling Egyptians abroad to import customs-free cars to the parliament’s coming general session to be discussed. The cabinet had approved previously a new draft law on granting Egyptian expats facilities which were referred to the parliament. The draft law, if approved, would allow Egyptians overseas to benefit from the tax-free car import initiative for another three-month period. (Arab Finance)
Edita Food Industries starts operating frozen food segment.
Edita has launched its newest frozen baked products line, Molto Forni. Molto Forni, an extension of Edita’s flagship brand Molto, is designed for “consumption at home” and will develop the company’s “traditional on-the-go snack packages,”. “Our venture into the frozen food sector falls right within our growth strategy of expanding into new segments and diversifying our revenue streams,” said Edita chairman Hani Barzi. Edita plans to inject 400 million EGP into Edita Frozen Food Industries — previously Fancy Foods — which it acquired in May for 380 million EGP and in addition to doubling its capex in 2023 to 800 million EGP. (Arab Finance)
TAQA Arabia wraps up procedures to establish new joint stock firm.
TAQA Arabia has finalized procedures to establish an Egyptian joint stock company named Aman TAQA for Electronic Payments Technology Company. The new firm will be established in partnership with Aman Holding Company for Non-Banking Financial Services Technology and Electronic Payments, and Aman for Electronic Payments Technology with an issued capital of 20 million EGP. TAQA Arabia will hold a 49% stake in the new company. (Al Mal)
UAE President holds phone calls with heads of state of Jordan, Egypt, Syria, Israel, and Canada to discuss regional developments.
During the discussions, His Highness Sheikh Mohamed emphasised the urgent need for de-escalation and called on all sides to exercise restraint in order to safeguard the lives of civilians. The UAE President reiterated the importance of dialogue and diplomacy, and encouraged the international community to support all efforts aimed at avoiding further conflict that jeopardises the security and stability of the region and its people. (Zawya)
On the global level, surprise Hamas attack on Israel boosts gold and US currency.
Gold prices and the US dollar rose on Monday morning as traders flocked to safer assets following Hamas’s attack on Israel. US gold futures added as much as 1.2% in early Asian trading, before paring gains to be up about 1% at 1,847.30 USD per troy ounce. The dollar also gained, adding 0.2% against a basket of peers. Israel’s leader Benjamin Netanyahu declared that the country was “at war” after Hamas launched the biggest attack inside the nation in decades at the weekend, sending militants across the border from Gaza, killing hundreds of Israelis and taking others captive. (Financial Times)
In addition, oil prices jump as Hamas attacks trigger supply concerns.
Crude oil prices rose in early Asian trading on Monday amid concerns that Hamas’s attack on Israel will increase tensions across the Middle East and affect output from leading producers. Brent crude, the international benchmark, jumped by 3.8% to 87.81 USD per barrel on Monday morning, a day after Israel’s prime minister, Benjamin Netanyahu, warned of a “long and difficult war”. Israel is not an oil producer, but there are concerns the conflict could trigger wider uncertainty in the Middle East and lead to tougher sanctions on oil from Iran, whose foreign ministry backed Hamas’s actions as an act of self-defence. (Financial Times)