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Egypt's Suez Canal dollar revenues fall for 3rd consecutive month

Ahram Online , Tuesday 10 May 2016
Suez Canal
A cargo ship is seen crossing through the New Suez Canal, Ismailia, Egypt, July 25, 2015 (Reuters)
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Egypt's Suez Canal revenues recorded EGP 3.48 billion ($396.4 million) in March, according to official figures published by the Suez Canal Authority.

In US dollars, the figure represents a 1.2 percent decline compared to the $401.4 million in revenues posted for the previous month, though the value in Egyptian pounds has increased due to a sharp devaluation of the currency in mid-March.

The pound has depreciated by close to 14 percent since March 14, when the central bank allowed the sharpest drop in the value of the currency against the dollar in years in response to a mounting foreign currency shortage.

The Suez Canal Authority's data shows revenues in pounds increasing by close to 12 percent from February to March. 

Revenue from the international waterway is a major source of foreign currency for Egypt and as such has historically been announced in dollars as well as in pounds.

The numbers on the Suez Canal Authority's website show revenues exclusively in pounds for the current calendar year, unlike the figures posted over the preceding 15 years.

Egyptian officials predicted Suez Canal revenues would increase following the inauguration of an additional lane to allow two-way traffic and works to deepen the main canal to allow the passage of larger vessels in August 2015, which cost upwards of around $4 billion.

Officials had claimed the new canal would more than double revenues to reach $13.2 billion in 2023. 

However, falling oil prices and a slowdown in world trade led receipts to register $5.2 billion in 2015, compared to $5.5 billion in the previous year, compounding the effect of falling foreign currency inflows from tourism, exports and workers' remittances, along with lower than expected foreign investments.

In dollars, revenues declined for the third consecutive month in March.

The official exchange rate is EGP 8.78 to USD1.

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