Egypt devaluation delay may only add to post-election pain

Egypt devaluation delay may only add to post-election pain

CAIRO - Egypt looks unlikely to devalue its currency again before a December presidential election for fear of popular unrest, but with the pound sagging against the dollar on the black market the delay means the move may simply be more painful when it comes, analysts say.

While President Abdel-Fattah al-Sisi is expected to win re-election, inflation has surged to record highs and deep-rooted economic problems have been exposed by a chronic shortage of foreign currency since early 2022.

All that points to the need for another devaluation, but authorities worry that this, or imposing austerity measures, during the campaign could trigger unrest at a time of high political tension, analysts said.

The election will take place on Dec. 10-12, the election authority announced on Monday.

In a $3 billion financial support package signed with the IMF last December, Egypt agreed to let its currency float freely and to speed up the sale of state assets to narrow its budget and current account deficits. Progress has been slow on both counts.

Since March, Cairo has kept the pound fixed against the dollar at a rate of 30.85/95 even as the local currency slid on the black market to around 40 pounds per dollar by mid-May.

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