The Egyptian pound could appreciate to 45 against the US dollar by the end of 2024, surpassing earlier forecasts of EGP 55 per USD, as per projections from Oxford Economics Africa.

This optimistic outlook follows the recent announcement of substantial $35 million foreign direct investment (FDI) inflows from the UAE to develop Ras El-Hekma project.

Since the announcement, the Egyptian pound has demonstrated resilience, experiencing a notable appreciation on the parallel market from approximately EGP 64 to EGP 52 per USD, although the official exchange rate remains steady at EGP 30.89 per USD.

While a devaluation of the pound on the official market is anticipated as Egypt finalizes loan negotiations with the International Monetary Fund (IMF), the magnitude of the depreciation is expected to be mitigated by the positive implications of the Ras El-Hekma deal, according to Oxford Economics.

In addition to IMF funds, Egypt is poised to secure additional foreign currency through similar agreements with other Gulf Cooperation Council (GCC) countries and proceeds from its state asset monetization program, which collectively aim to address the country's financing gap.

However, Oxford Economics cautioned against viewing the Ras El-Hekma deal as a panacea for Egypt's long-term economic challenges, emphasizing the need for sustained fiscal discipline to avert future crises.

"While the Ras El-Hekma deal represents a significant step forward for Egypt's economy, enduring solutions require a commitment to fiscal prudence," remarked the Oxford-based think-tank. "Only through steadfast fiscal discipline can Egypt chart a course towards lasting economic stability and prosperity."

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