Egypt

Egypt is expecting approval of a new $3 billion Extended Fund Facility package from the International Monetary Fund next week, Deputy Finance Minister Ahmed Kouchouk said on Wednesday, Reuters reported. Egypt's finances remain fragile despite two major currency devaluations this year and the IMF package, which was announced in October as Egypt pledged to shift to "durable exchange rate flexibility" in line with long-standing IMF demands.

The International Monetary Fund reached a preliminary agreement with the Egyptian government Thursday that paves the way for the economically troubled Arab nation to access a $3 billion loan, officials said Thursday, the Associated Press reported. IMF officials said that a staff agreement between the Egyptian government and IMF leaders had been reached following months of talks, as Egypt struggles to combat surging inflation caused, in part, by the war in Ukraine.

Egypt will develop a new currency indicator partly to wean people off the idea that the Egyptian pound should be pegged to the U.S. dollar, the new central bank governor said on Sunday, Reuters reported. Hassan Abdalla, appointed in August, told an economic conference that the central bank was also working to introduce currency hedging and had already finished futures contracts as it revamps its currency trading system. The indicator would be based on a basket of several currencies and possibly gold, he said.

Inflation in urban parts of Egypt accelerated to its fastest level since November 2018 on the back of higher food costs, Reuters reported. Consumer prices climbed 14.6% from a year earlier in August, versus 13.6% the previous month, the state-run statistics agency CAPMAS said Thursday. Food and beverage costs, which make up the largest single component of the inflation basket, jumped 23.1%. On a monthly basis, price growth slowed to 0.9% from 1.3% in July.

Egypt’s president on Thursday appointed a caretaker governor of the central bank, the president’s office said, a day after the bank’s chief resigned amid a grinding economic crisis triggered by Russia’s war on Ukraine, the Associated Press reported. According to a statement, President Abdel Fattah el-Sissi named Hassan Abdullah to succeed Tarek Amer, who had held the post since 2015. The appointment still needs to be ratified by the state-controlled parliament, which is in recess until October.

Egypt’s central bank governor resigned Wednesday as the Middle East’s most populous nation struggles to curb inflation triggered by Russia’s war in Ukraine, high oil prices and a drop in tourism, the Associated Press reported. President Abdel Fattah el-Sissi accepted the resignation of Tarek Amer and named him a presidential adviser, the Egyptian leader’s office said in a statement. The brief statement offered no explanation for Amer’s resignation. No replacement was immediately named for Amer, who had been appointed governor of the central bank in November 2015.

Egyptians are finding some consumer goods increasingly hard to come by, as attempts to buffer the currency ripple across the $400 billion economy that’s running short on dollars, Bloomberg News reported. Although basic commodities are freely available, shortages in more luxurious products -- ranging from summer clothes to imported cars -- are becoming common. Choices for customers have dwindled at fast fashion groups like Mango, Zara and H&M.

Egypt's annual urban consumer inflation slowed to 13.2% year-on-year in June from 13.5% in May, data from the state statistics agency CAPMAS showed on Thursday, Reuters reported. Month on month, headline inflation eased 0.1%, compared to a 1.1% increase in May. The sharpest annual price increases were in the food and drink, recreation, and restaurant and hotel sectors, according to CAPMAS. The central bank on Thursday said core inflation, which excludes volatile items such as food, rose to 14.6% year on year in June from 13.3% in May.

Egypt’s central bank surprised most economists by leaving interest rates unchanged on Thursday, saying it can do little about external shocks to prices a month after delivering its biggest hike in nearly half a decade, Bloomberg News reported. The Monetary Policy Committee maintained the deposit rate at 11.25% and the lending rate at 12.25%, a decision predicted by only three of 13 analysts surveyed by Bloomberg. While its move in May was more hawkish than expected, the central bank now appears content to wait out what it called “transitory deviations” of inflation from target.

Egypt surprised most economists by delivering its biggest interest-rate hike in nearly half a decade, an attempt to tackle soaring inflation and restore the allure of its local debt with foreign investors, Bloomberg News reported. The central bank increased the deposit and lending rates by 200 basis points each to 11.25% and 12.25% respectively, the Monetary Policy Committee said Thursday in a statement. Only one economist in a survey of nine correctly predicted the decision, with most forecasting an increase of 100 basis points.