Egypt's central bank allowed the pound to float more freely in March 2024, resulting in a devaluation from approximately 31 to 49 per dollar. Combined with previous devaluations in 2022 and 2023, the Egyptian pound has lost over 70% of its value against the dollar since January 2022. The move was a condition of an expanded $8 billion IMF Extended Fund Facility, replacing the earlier $3 billion programme.
Suez Canal Revenue Hit
The Houthi attacks on commercial shipping in the Red Sea have severely impacted Suez Canal revenues, one of Egypt's top foreign currency earners. Transit revenue fell approximately 50% in 2024, a loss estimated at $3-4 billion. The Suez Canal typically generates $8-9 billion annually and is a critical source of hard currency alongside tourism, remittances, and natural gas exports.
Ras el-Hekma Investment
The UAE's Abu Dhabi Developmental Holding Company (ADQ) committed $35 billion to develop the Ras el-Hekma area on the Mediterranean coast, with $24 billion already disbursed. This single investment has been the primary factor preventing a more severe currency crisis, providing a one-off injection of foreign reserves that temporarily stabilised the pound.
Food Security
Egypt is the world's largest importer of wheat, purchasing approximately 12-13 million tonnes annually. Food price inflation has been particularly painful for the nation's approximately 105 million people, with bread and staple food costs rising over 50% since the 2024 devaluation. The government's subsidised bread programme, which provides five loaves daily to approximately 70 million registered citizens, has faced increasing fiscal pressure.
For Egyptian economic data, visit Central Bank of Egypt. For the IMF programme, see IMF Egypt.