Egypt’s Energy Rise After Floating Currency

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Presentation transcript:

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems Floated Currency: Egypt rose energy prices from last November, hours after the central bank floated the pound currency.

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems Floated Currency (continued): The move comes as part of Egypt’s austerity measures aimed at securing a three-year, $12bn International Monetary Fund loan agreement.

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems Price of Fuel: The price of 92 octane gasoline rose 34.6% to 3.5 Egyptian pounds ($0.2258) from 2.6 pounds per liter while 80 octane gasoline will go up 46.8% to 2.35 pounds from 1.6.

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems Price of Fuel (continued): Diesel rose to 2.35 pounds per liter, an increase of 30.5% from 1.8. The less commonly used natural gas for vehicles rose by 45.5% to 1.6 pounds per cubic meter, up from 1.1 pounds.

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems Floating Egyptian Currency : In November 2016, Egypt devalued its currency by a third and allowed its pound to float freely. The central bank devalued the pound by 32% as it set a new official exchange rate of 13 to the US dollar compared with 8.88 previously. It also raised its benchmark interest rate by 300 basis points to 14.75%.

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems After Egypt’s Floating Currency: After the free-float was put in place the Egyptian pound rose as much as 14 to the US dollar before dropping back again. Egyptian stocks also jumped, with the benchmark EGX 30 index up more than 8 per cent at one point, the most in eight years.

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems Egypt’s Government Finances: The government finances was hit by the devaluation because the state is the main importer of food commodities and fuel and also has debt obligations in dollars.

Egypt’s Energy Rise After Floating Currency Session 3 Issues & Problems End Of Session 3