💵𝐑𝐚𝐬 𝐄𝐥-𝐇𝐞𝐤𝐦𝐚 𝐃𝐞𝐚𝐥🌴: 𝐀 𝐪𝐮𝐢𝐜𝐤 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐛𝐫𝐞𝐚𝐤𝐭𝐡𝐫𝐨𝐮𝐠𝐡 𝐛𝐮𝐭 𝐥𝐨𝐧𝐠-𝐭𝐞𝐫𝐦 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬 𝐫𝐞𝐦𝐚𝐢𝐧. In our latest #analytical #note, we present our take on the recent Ras El-Hekma major #investment deal, how this should impact #Egypt's external position, #currency, #inflation, #interest #rates, among others, and what questions still remain to be answered regarding the comprehensive #economic #reform process supported by the (still crucial) #IMF program. To subscribe to our economic advisory services and associated reports, please get in touch with us at info@dcodeefc.com.
Sherif El Diwany
7mo
Timely professional work as always. Projection slide and after not legible.
Government Executive | Oil & Energy Expert: Exploration & Agreements | Business Development & Research Advisor | Geoscience Guru | DBA & MBA
7moThe deal presents an excellent opportunity to support the Egyptian economy amidst the recent challenging circumstances, attract further foreign direct investment into the Egyptian market, hopefully, into other productive sectors alongside real estate and tourism, as well as boosting confidence in the financial system, particularly with finalizing an agreement with the IMF on a new financing package. However, as you mentioned, there is an anticipated FX adjustment, coinciding with a substantial injection of Egyptian Pounds into the markets stemming from the conversion of $11B of previous UAE debts owed to the CBE to be utilized in Ras Elhekma project. This will inevitably lead to an increase of liquidity availability for consumers, and consequently, heightened demand for goods and services, resulting in inflationary pressures in the short term once again. Therefore, the practical solution to mitigate the inflationary impact maybe in leveraging a segment of the $ liquidity to finance "productive" projects with quick returns in the short and medium term to increase the supply of goods in the local market, thereby curbing price inflation, and consequently alleviating pressure on the USD cash reserves in the future.