The Ukrainian War has hit 104 million Egyptians hard, suffering from Egypt’s sluggish economy and high costs of food, medicine and other vital imports.
The situation has forced governments and central banks to take unprecedented measures.
To increase the supply of foreign currency to purchase vital imports and reduce inflation by 18%, Egypt’s largest state-owned banks, the National Bank of Egypt and the Misr Bank, launched Egyptian Pound Savings Certificates with an annual interest rate of 25%. issued. 22.5% monthly. These are the highest interest rates ever offered by Egyptian banks.
The aim is to create local demand for the Egyptian Pound, which has lost 60% of its value against the dollar since early 2022.
Instead of keeping bank deposits in Egyptian pounds, Egyptians are storing and transferring dollars and other hard currencies abroad, depleting their foreign exchange. Cabinet spokesman Nader Saad said $9.5 billion worth of goods remained in Egyptian ports until foreign currency was obtained to pay for them.
Foreign investors withdrew billions of dollars from Egypt after the Ukrainian war broke out, while the tourism sector, which employs 10% of the 27 million workers and accounts for 20% of GDP, has seen a decline in total arrivals. lost tourists from Russia and Ukraine, who accounted for about a quarter of all tourists.
Egypt has been forced to pay more for essential imports of wheat and livestock feed previously sourced from Russia and Ukraine, as well as vegetables and raw materials to manufacture products for export. Clearing up food for farms and livestock is a priority, but prices are skyrocketing.
A 50% rise in the price of previously affordable chicken has prompted the government’s National Institute of Nutrition to promote the consumption of chicken foot soup as a cheap source of protein. This sparked social media outrage, which was reported by local and foreign media outlets.
Workers can no longer afford koshari, a popular dish of lentils, chickpeas, pasta and spicy tomato sauce, The Washington Post reported.
Middle-class families have relied on broad beans and lentils, the wealthy have lived in luxury, and the government has continued to build a new administrative capital 45 kilometers east of Cairo.
Egypt’s foreign exchange reserves have been dangerously depleted by the need to fund expensive imports, projects and interest on loans, but cash injections by Saudi Arabia and the United Arab Emirates have pushed the crisis in part eased.
Egypt’s foreign exchange reserves are $34 billion. The International Monetary Fund agreed to provide Egypt with her first $3 billion loan, and another $14 billion to stabilize the economy and provide her third of poverty-stricken Egyptians. May add dollars.