Egypt

The European Union is trying to speed up efforts to deepen its relationship with Egypt and help the country address the growing fallout from the Israel-Hamas conflict on its border, Bloomberg News reported. European Commission President Ursula von der Leyen is planning to visit Cairo soon to advance efforts to support Egypt’s economic development and cushion the impact of the ongoing crisis, people familiar with the matter said.

Egyptian inflation eased from a record high to its lowest level in four months ahead of December’s presidential elections, Bloomberg News reported. Price growth in urban parts of Egypt slowed to an annual 35.8% in October, from 38% the month before, according to figures released Saturday by the state-run statistics agency. It’s the lowest rate since June, according to Bloomberg calculations. On a monthly basis, inflation slowed to 1% from 2% in September.

Egypt was downgraded for the second time this month, as the North African nation struggles with a severe shortage of hard currency, Bloomberg News reported. S&P Global Ratings, cut the country’s debt deeper into junk territory, to B- from B, albeit with a stable outlook. The decision puts the country on par with nations such as Bolivia, Angola and Iraq. The move follows that of Moody’s Investors Service, which lowered Egypt one level to Caa1 in early October, triggered a further sell-off of Egyptian bonds. S&P’s rating for Egypt is now one notch above that of Moody’s.

Egypt was downgraded further into junk territory by S&P Global Ratings, as the North African nation struggles with a severe shortage of hard currency, Bloomberg News reported. S&P cut the country’s debt to B- from B, with a stable outlook, the ratings company said in a statement. The decision puts the country on par with nations like Bolivia, Angola and Iraq. “The downgrade reflects the recurring delays to the implementation of monetary and structural reforms,” S&P said.

Egypt expects to borrow at least $1.5 billion before the end of this year, Finance Minister Mohamed Maait said, largely by looking to tap Asian capital markets as part of debt issuance guaranteed by development institutions, Bloomberg News reported. The plans include $500 million in what would be Egypt’s debut panda bonds and its second sale of Samurai debt worth the same amount, Maait told Bloomberg News in an interview in Marrakech, where he’s attending the annual meetings of the International Monetary Fund and the World Bank.

Egypt will “bleed” precious reserves unless it devalues its currency again, the managing director of the International Monetary Fund said, as she praised other steps her institution’s second-largest borrower has taken to right its stricken economy, Bloomberg News reported. In a wide-ranging interview, Kristalina Georgieva also said Zambia and Ghana, which have both defaulted on their debt, are making progress under their IMF programs, while Tunisia doesn’t need a restructuring yet but should act soon to shore up its economy.

Egypt’s inflation accelerated to another record high, with a new surge in food costs heaping more pressure on a country struggling with a debilitating foreign-currency crunch, Bloomberg News reported. Consumer prices in urban parts of the country rose an annual 36.5% in July, up from 35.7% the previous month, according to figures released Thursday by the state-run CAPMAS statistics agency. On a monthly basis, inflation was 1.9%, compared with 2.1% in June. The headline inflation rate’s now further beyond the level reached in the aftermath of Egypt’s 2016 currency crisis.

Egypt unexpectedly resumed its cycle of monetary tightening, seeking to tame inflation that’s running at an all-time high, Bloomberg News reported. The central bank’s Monetary Policy Committee raised the deposit interest rate by 100 basis points to 19.25% and the lending rate to 20.25%, according to a statement Thursday. Rates are now the highest since at least 2006, and above the previous peak reached during the currency crisis of 2016-2017. Of 11 economists surveyed by Bloomberg, only BNP Paribas SA correctly predicted the hike, with the rest seeing no change.

Net foreign assets held by Egypt’s commercial banks went into a record deficit in June, as a lack inflows drives a deterioration in the finances of a country already struggling with its worst hard-currency shortage in years, Bloomberg News reported. The gap among lenders reached $17.1 billion, compared with $14.5 billion in May, according to data released by the central bank. The shortfall opened up as a result of a $1.7 billion drop in banks’ assets and an around $950 million increase in their liabilities.