CAIRO: Egypt’s currency fell to a record low, trading at over 52 to the US dollar on Sunday, as the economic fallout of the war in the Middle East hits the region’s most populous country.
The US-Israeli war on Iran has expanded across the Gulf and beyond, upending global energy markets and trade, and virtually halting traffic in the Strait of Hormuz, through which a fifth of the world’s crude oil travels.
President Abdel Fattah al-Sisi last week warned that the country was in a “state of near-emergency”, warning of renewed inflationary pressures.
Despite Egypt not having been directly hit by the war, the fighting has nonetheless pushed some shipping companies away from its Suez Canal, a key source of foreign currency.
Egypt’s import-dependent economy has proved highly sensitive to currency fluctuations in the past.
Inflation — 11.9 percent in January — peaked at nearly 40 percent in August 2023, on the back of a punishing economic crisis that has since eased, thanks in part to an over USD50 billion bailout, mainly from the United Arab Emirates.
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