Egypt secured a deal with the IMF in which the government agreed to cough up another $5 billion, increasing its ongoing bailout program since 2022 from a loan of $3 billion to $8 billion.
Egyptians are being hit with another round of price increases at the end of March 2024, less than three weeks after their government implemented further economic “reforms.” The policy changes were put in place to satisfy the conditions attached to the additional bailout loan the government secured from the International Monetary Fund (IMF) earlier in the month.
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| Workers and volunteers work to prepare free food boxes at the Egyptian Food Bank in Cairo, Egypt, on March 2, 2024. (Xinhua/Ahmed Gomaa) |
Effective March 22, the government has imposed a hike of over 33 percent on the price of butane gas cylinders on which millions, especially poorer households, depend for cooking. The supply of natural gas is limited to just over half of all Egyptian households.
Another price hike of almost 18 percent on diesel, which fuels most of the transportation of people and goods, will exert further upward pressure on the prices of commodities, including essentials like food. As of February 2024, Egyptians were already suffering a food price increase of more than 50 percent over the same period in 2023.
On March 6, Egypt secured a deal with the IMF in which the government agreed to cough up another $5 billion, increasing its ongoing bailout program since 2022 from a loan of $3 billion to $8 billion.
The main objective of the program is to get the government to stop exercising controls over its currency’s exchange rate and “shift to a flexible exchange rate regime whereby the value of the Egyptian pound would be determined freely against other currencies,” the IMF explained.
The government’s fulfillment of this “objective” of the IMF immediately brought the Egyptian pound crashing down in value by 55 percent, plunging it to a record low of 48 pounds per U.S. dollar.
from the Peoples Dispatch / Globetrotter News Service
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