The impact of the billions injected into the Central Bank of Egypt’s (CBE) coffers following last week’s Ras Al-Hekma deal has yet to be felt by prices in the market.

Apart from declines in the prices of legumes and rice, foodstuffs such as fruit, vegetables, meat, poultry, and dairy products still cost roughly the same. A similar pattern applies to appliances and electronics.

The CBE received $10 billion as part of a $35 billion deal allowing ADQ, the UAE-based development holding company, to develop the Ras Al-Hekma region on Egypt’s North Coast.

Following the announcement of the deal, the government said it would make available the hard currency needed to release food items held up in customs in an attempt to cover shortages in the market and help ease prices.

Some months ago, frozen meat rose from LE200 to LE320 a kg and now costs LE300, Shaimaa Mahdi, a housewife in her 40s from Kobri Al-Qobba district of Cairo, told Al-Ahram Weekly.

Fresh meat remains at the same price of LE450 a kg, with camel meat costing LE350. Poultry prices experienced a similar hike some months ago, with filet rising to LE250 to LE270 a kg, which Mahdi said had forced her to buy chicken from the neighbouring district of Ain Shams where the price is cheaper at around LE220.

Noting that a ration card is necessary to purchase goods in government food co-ops, Mahdi said that a bag of macaroni costs LE12 in these outlets as opposed to LE15 to LE17 elsewhere. This is where she goes to buy sugar at a reasonable price.

Sama Ibrahim, a public-sector employee who lives in the Agouza district of Cairo, said that if prices have gone down at all, the decrease has been minimal. The price of a 2.2 litre bottle of corn oil has dropped from LE290 to LE270, a carton of 30 eggs has declined slightly from LE165 to LE160, while rice remains high at LE40 for a bag of a higher-quality brand.

According to Hassan Mabrouk, head of the Household and Electrical Appliances Division of the Chamber of Industries, prices will go down only when the banks meet importers’ credit needs at lower exchange rates than available in the parallel market.

He added that while the current drop in the price of the dollar will not bring prices down, at least it should stabilise them.

The prices of some unpackaged dry goods are more flexible. Mahmoud Issa, who lives in the Haram district of Giza, said that in his neighbourhood unpacked rice was LE28 a kg, down from LE33, and pulses such as fava beans and black-eyed peas, are down to LE10 and LE15 a kg, respectively.

Many food products can be significantly cheaper outside major metropolitan areas. This is why Mervat Mahmoud does much of her food shopping in Minya Al-Qamh. Fresh meat costs only LE380 a kg there instead of almost LE450 in Cairo. Butter sells for LE250 a kg in contrast to LE280 in Cairo.

Meanwhile, the prices of electrical appliances have barely budged despite the decline in the value of the dollar in the parallel market, to which manufacturers and merchants had to resort to obtain hard currency for their import needs.

Cars are among the main manufactured goods that should reflect the decline in the exchange rate, not so much in the cost of the car itself, but in the associated overheads.

However, according to Khaled Saad, secretary-general of the Association of Automobile Manufacturers, the amount of any reduction depends on the model of the car and varies from one dealer to the next.

There are no official figures, but the price of some models could go down to around LE400,000, he said.

However, if the CBE devalues the pound and the official exchange rate climbs to LE40 to LE45 to the dollar, this will not necessarily bring down automobile prices.

Importers still have to pay customs duties, shipping costs, and other expenses in hard currency, and these come to around 50 per cent of the price of a car on the local market.

* A version of this article appears in print in the 7 March, 2024 edition of Al-Ahram Weekly