‘There are no dollars’: foreign currency crunch hits Egypt’s economy

‘There are no dollars’: foreign currency crunch hits Egypt’s economy

With foreign currency in short supply in Egypt, Rafik Clovis spent December anxiously waiting to find out whether his bank would be able to provide the $67,000 he needed to fund the import of a consignment of car parts from Europe.

But by the end of the year, the dollars were still not available; as a result, his imports in 2022 were just a tenth of a normal year’s amount.

“Conditions are catastrophic,” Clovis said. “There are no dollars and I have no idea how it will be resolved. I have five employees, and now we are surviving off what we made in previous years.”

The importer’s predicament is shared by many businesses as Egypt struggles with a foreign currency crunch. The first three weeks of Russia’s full-scale invasion of Ukraine in February led to $20bn of outflows from the Arab world’s most populous country as foreign portfolio investors rushed to safe havens.

Despite $13bn in deposits from the United Arab Emirates, Saudi Arabia and Qatar and another $3.3bn in asset sales to the UAE in 2022, foreign currency has remained in desperately short supply for the import-dependent country.

A week ago President Abdel Fattah al-Sisi said banks would secure the foreign currency necessary to clear