The Central Bank of Egypt (Photo: Al-Ahram)
Egypt’s NIRs declined considerably as a result of the Russian-Ukrainian war to post $37 billion in March 2022, falling to its lowest levels since May 2020.
Moreover, $22 billion in hot money, indirect investments in the local debt instrument, fled the market since the start of the war, according to recent figures reported reported by the finance minister.
As part of its measures to deal with the repercussions of the war, the CBE has raised key interest rate by a total of three percent (3 bps) and depreciated the Egyptian pound against the US dollar by more than 20 percent.
The CBE interest rate decision pushed the price of the US dollar price in the local market to its highest levels since the government implemented the IMF-backed economic reform programme in 2016.
On Wednesday, the US dollar traded at EGP 19.61 for buying and EGP 19.68 for selling.
The CBE has recently taken a number of measures to put the brakes on the rate of increase in US dollar prices and also to facilitate import and export transactions.
The International Monetary Fund (IMF)'s managing director Kristalina Georgieva has recently said a final agreement with Egypt about a new IMF loan could be reached within weeks possibly.