DUBAI: Egypt is planning “big deals” to ensure liquidity and will work with merchants to control prices and prioritise foreign currency access for staple commodity importers after letting the currency depreciate sharply, the prime minister said on Thursday.
The interior ministry has also been ordered to use an “iron fist” with black market currency traders, Prime Minister Mostafa Madbouly said at a press conference. He did not elaborate on the deals.
Egypt’s move to hike interest rates by 600 basis points and let the Egyptian pound depreciate sharply against the dollar as it secured an expanded IMF programme on Wednesday came less than two weeks after the government announced a $35 billion investment deal with Emirati sovereign fund ADQ.
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The ADQ investment has triggered speculation about further potential deals, including potential development of vacant land near the South Sinai resort of Sharm el-Sheikh.
Egypt has an ambitious programme to divest state assets, and has pledged to the IMF that it will take steps to encourage the private sector and scale back exemptions for state-owned enterprises.
“The country is open, working on, and plans other big deals in the coming period to manage monetary liquidity to finally end the suffocating crisis of the foreign currency we were suffering from,” Madbouly said.
The expanded IMF deal also provides for a framework to slow down infrastructure spending that has accelerated under President Abdel Fattah al-Sisi, and for offering social protection to vulnerable groups.
Madbouly said the government was planning to invest in education, healthcare and finishing existing projects in the financial year that starts in July.
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