Fitch, the credit rating agency, announced that the agreement between Egypt and the UAE to develop the Ras El Hekma project worth $35 billion will ease external liquidity pressures on Egypt, and will also facilitate the possibility of adjusting the exchange rate.
Fitch said that adjusting the exchange rate would provide an incentive for the International Monetary Fund to agree to an enhanced support program for Egypt.
Fitch added that Egypt will continue to face major economic and financial challenges that put pressure on its credit position.
The Fitch report also stated that the macroeconomic situation in Egypt “will remain difficult” in the fiscal years 2024 and 2025, with high inflation rates and relative weakness in growth rates.
The Director of the International Monetary Fund, Kristalina Georgieva, said that the Fund succeeded in resolving the basic issues with the Egyptian authorities regarding its review of a loan program with Egypt worth three billion dollars.
She added in statements to Reuters at the time that it was expected that the final touches on an additional financing package would be finalized within weeks.
The official spokesman for the Egyptian Council of Ministers, Mohamed Al-Homsani, announced that the Egyptian government had received another five billion dollars from the first installment of the investment partnership deal with the UAE, regarding the project to develop the city of “Ras Al-Hikma” on the northwestern coast of Egypt. Al-Homsani said: “With this, the first batch has actually been completed.”
Fitch expected inflation rates in Egypt to decline on an annual basis in the second half of 2024, due to the high comparison basis.
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2024-04-29 05:59:23