With a little help from its friends, Egypt appears to have turned a corner in its economic crisis. The unprecedented $35bn investment in the country’s Ras al-Hekma project by Abu Dhabi has, in a stroke, eradicated concerns over dwindling foreign currency reserves and assuaged fears of a sovereign default.
The Emirati funds, the first tranche of which have already been received, enabled the Central Bank of Egypt last Wednesday to hike interest rates by an unprecedented 600 basis points in a decisive move against the country’s sky-high inflation. It also allowed the country’s currency to weaken against the dollar by 40 per cent — the deepest devaluation of the past 10 years — a long-called-for move to restore foreign investor confidence in the country.
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Source link : https://www.thebanker.com/Abu-Dhabi-and-IMF-backing-gives-Egypt-a-shot-at-economic-turnaround-1710154346
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Publish date : 2024-03-11 07:00:00
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