Egyptian Prime Minister Mostafa Madbouly announced Monday a series of measures to control public spending and the use of the US dollar amid Egypt’s economic crisis, including restrictions on non-essential travel for members of government.
The new rules include the following, according to the state-owned news outlet Al-Ahram:
• The delay of any new projects that require the US dollar.
• The Finance Ministry setting exchange rates for foreign currency in coordination with the Central Bank.
• Delayed funding for anything that is not a “strong necessity.”
• Business foreign travel for government ministers must be approved by the prime minister.
The measures will remain in effect for the rest of Egypt’s fiscal year, which ends in July, according to the circular.
Why it matters: Egypt is experiencing a litany of financial and economic problems at present. Inflation plagued the country throughout 2022, and living expenses are still rising. The Central Bank of Egypt raised interest rates last month in an effort to curb inflation. Some Egyptian banks also instituted measures last week to encourage saving.
Egyptian banks in October also started limiting foreign currency withdrawals — including the US dollar — due to the country’s dwindling foreign currency reserves.
The Egyptian pound is at a historic low to the US dollar and fell even more today. The Egyptian pound traded at around 27.6 pounds to the dollar as of 1:30 pm ET, down from roughly 27.2 pounds at the end of Sunday. The rate in January of 2022 was around 15.7 pounds to the dollar.
Know more: Egypt is also seeking more foreign investment in the Suez Canal in response to its economic woes.