5 things that happened this week (Egypt special):
Big policy moves on 6 March:
- Lifting interest rates by 6 percentage points
- Floating the currency, leading to a 38% decline on the day (chart)
- Agreeing on a loan with the IMF
1/5
bloomberg.com
Big policy moves on 6 March:
- Lifting interest rates by 6 percentage points
- Floating the currency, leading to a 38% decline on the day (chart)
- Agreeing on a loan with the IMF
1/5
bloomberg.com
Egypt expects the steps will unlock $20 bn of funding:
• $8 bn from the IMF loan
• $1.2 bn from the IMF's Resilience and Sustainability Facility
• Rest from: World Bank, EU, Japan, UK
2/5
bloomberg.com
• $8 bn from the IMF loan
• $1.2 bn from the IMF's Resilience and Sustainability Facility
• Rest from: World Bank, EU, Japan, UK
2/5
bloomberg.com
And hot money could return to Egypt:
- Hot money: borrows where interest rates are low, to invest where they're high
- Egypt was hot-money darling in 2017-21 (blue in chart)
- It's re-opening the path now by: raising rates, removing currency controls
3/5
bloomberg.com
- Hot money: borrows where interest rates are low, to invest where they're high
- Egypt was hot-money darling in 2017-21 (blue in chart)
- It's re-opening the path now by: raising rates, removing currency controls
3/5
bloomberg.com
The trigger for this week's events in Egypt was a mega UAE bailout on 23 Feb
Abu Dhabi will invest $35 bn in real-estate projects, mostly in an area called Ras El-Hekma
Saudi is also in talks to develop a Red Sea area, called Ras Gamila
4/5
bloomberg.com
Abu Dhabi will invest $35 bn in real-estate projects, mostly in an area called Ras El-Hekma
Saudi is also in talks to develop a Red Sea area, called Ras Gamila
4/5
bloomberg.com
Taking stock of 2 years of crisis in Egypt
Here's how macro variables have moved since Jan-2022:
- Pounds per dollar: 15.7 --> 49.4
- Currency down 68%, 2nd worst in major emerging markets
- Inflation: 7% --> 30% before the latest moves
- Interest rate: 8.25% --> 27.25%
5/5
Here's how macro variables have moved since Jan-2022:
- Pounds per dollar: 15.7 --> 49.4
- Currency down 68%, 2nd worst in major emerging markets
- Inflation: 7% --> 30% before the latest moves
- Interest rate: 8.25% --> 27.25%
5/5
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