Egypt's economy will stand on firmer ground

Significance Its actions included floating the currency, which triggered a major devaluation, and a 600-basis point increase in its benchmark interest rate to 27.75%. Meanwhile, the government also committed to rein in spending on large infrastructure projects and to bring the accounts of all state entities under central budget supervision. Impacts Inflation is likely to ease in the latter part of 2024, allowing for the interest rate hikes to be unwound. Egypt will likely receive an additional USD1.2bn from the IMF’s environmental fund, as well as further aid from the World Bank and the EU. The exchange rate will likely settle in a new range at around a 25-30% devaluation from the previous fixed rate.