Egypt may choose gradual currency devaluation
Egypt may choose gradual currency devaluation. Monetary policy makers in Egypt are expected to opt for a gradual devaluation of the EGP instead of any abrupt changes to avoid a surge in inflation, according to Moody’s latest report. Egypt’s annual headline inflation recorded 14.6% in July 2022, compared to 6.1% in the same month of 2021. The effectiveness of this path will depend on the continuation of inflows from the GCC and other official sources to offset the impact of net outflows, currency devaluation, inflation, and the increase in the cost of borrowing from both local and foreign sources, along with the surge in debt service. (Asharq Business)
- However, this policy is not without risks, as a rigid exchange rate would delay an agreement with the International Monetary Fund (IMF) and hinder access to global debt markets.
Egypt’s total debt service surged 105.76% year-on-year (YoY) during the third quarter (Q3) of the fiscal year (FY) 2021/2022, recording 6.292 billion USD. Moody’s report referred to the appointment of Hassan Abdallah as acting governor of the Central Bank of Egypt (CBE) and to the strong regional relationships he formed during his time at the Arab African International Bank, especially with GCC partners. This comes in the light of Egypt’s increasing financial exposure to the GCC, which exceeded 25.9 billion USD of Egypt’s liquid international reserves at the end of July. Egypt’s net international reserves (NIR) recorded 33.143 billion USD at the end of July 2022. (Asharq Business)
- Offering new investment opportunities with full facilities. 3 logistic and commercial zones that provide nearly 15,000 job opportunities with around 2.4 billion EGP of investments.
Ibrahim Ashmawi, Senior Assistant Minister of Supply and Head of the Internal Trade Development Authority, confirmed that the new logistical commercial areas to be established in the governorates of Suez, Kafr El-Sheikh and Dakahlia will provide approximately 15,000 direct and indirect job opportunities, including commercial and administrative activities, warehouses and exhibition halls for goods. (Hapi Journal)
- Egypt's purchase of local wheat is a candidate to reach a record level.
The wheat planting season starts in mid-November until the end of January, while the harvest season starts from mid-April until mid-July each year. But the government extended it until the end of August, in an effort to buy as much local wheat as possible to ease the import burden. In addition, the country's stockpile of wheat is sufficient to cover the country's needs for a period of 7 months. (Hapi Journal)
- Egypt bought last season 3.6 million tons from farmers. And 3.62 million acres of wheat were planted this season, the largest area ever in the country's modern history.
The consumption of wheat in Egypt, by the government and the private sector, exceeds 13 million tons annually. Egypt aims to obtain local imports of up to 6 million tons of wheat during the current season. (Hapi Journal)
- El-Sisi meets Madbouly, Maait to examine financial indicators.
The meeting addressed the indicators of the fiscal year (FY) 2021/2022 which showed positive results making Egypt among the few countries all over the world that achieved a primary surplus of 1.3% of the gross domestic product (GDP), while most of the emerging market reported a primary deficit of 4.7% in the same period. In FY 2021/2022, public revenue grew around 20% year-on-year (YoY), while the annual total expenses increased by 14.8% YoY. (Arab Finance)
- El-Sisi gave directives for the continuation of the financial control approach and the maintenance of the safe path of the public budget.
He called for devising a medium-term strategy to reduce as much as possible the debt-to-GDP ratio. Moreover, the meeting covered the projects of the Ministry of Finance in the sectors of taxes, customs, Universal Health Insurance, the government financial network, and the digital payroll system, as well as electronic payment and collection. (Arab Finance)
- UAE’s investments in Egypt jump over 169% YoY in H1 2021/22.
Total Emirati investments in Egypt surged 169.1% year-on-year (YoY) to 1.9 billion USD during the first half (H1) of the fiscal year (FY) 2021/2022. The trade exchange between Egypt and the UAE inched up to 1.2 billion USD during the first quarter (Q1) of 2022 from 1.1 billion USD during the same period in 2021. Egypt’s imports from the UAE declined by 19% YoY to 642.9 million USD in Q1 2022, while Egypt's exports to the GCC country soared 69.5% YoY to 576.7 million USD in the same period. (CAPMAS)
- Remittances from Egyptians working in the UAE edged higher 1.4% YoY to 3.5 billion USD in FY 2020/2021.
On August 21st, Egyptian President Abdel Fattah El-Sisi welcomed President of the UAE Mohamed bin Zayed bin Sultan Al Nahyan at El Alamein International Airport. The two presidents discussed bilateral cooperation. (Arab Finance)
- Moving to our EGX and companies, Hermes and Emirates NBD lead the launch of Al Ansari Exchange on the Dubai Stock Exchange.
Al Ansari Exchange has chosen EFG Hermes and Emirates NBD to lead its planned IPO on the Dubai Stock Exchange, according to people familiar with the matter. The people reported that the exchange company, based in the United Arab Emirates, may be listed on the Dubai Financial Market in the first quarter of 2023, requesting anonymity because the information is confidential. They added that preparations for the initial public offering were continuing, but specific details such as timing could change. (Asharq Business)
- It is worthy to mention that the region of the Arab Gulf states is still a bright spot for public offering activity.
with the increasing flow of potential listings, although some shares that were listed in recent months witnessed faint transactions during their first trading sessions on the stock exchange. After being among the best performing indices in the world at the beginning of this year, the major stock indices in the Gulf region have since given up many of their gains. The last two companies listed in Dubai, "Union Coop", the operator of the supermarket, and "Tecom" real estate, declined in their first trading days. (Asharq Business)
- Raya Holding’s unit, Zain Saudi Arabia ink strategic partnership contract.
RAYA Customer Experience (RAYA CX), a subsidiary of Raya Holding for Financial Investments (RAYA), has signed a strategic partnership contract with Zain Saudi Arabia. Under the signed contract, RAYA CX will offer outsourcing services to the leading telecom operator, which will contribute to the improvement of customers' experience in Saudi Arabia. The partnership will build on RAYA CX’s contributions to the outsourcing industry in supporting major companies across the world and will help it bolster its presence in the Gulf region, particularly after the acquisition of Gulf CX in 2021. It is noteworthy that Gulf CX, which was founded in 2015, operates through three branches in Bahrain, Saudi Arabia, and the UAE. (EGX)
Stay up to date
More Newsletter to Check
SUBSCRIBE TO NEWSLETTER
Subscribe to download our daily economics and business roundup
×
![]()