Remittances sent by Egyptians working overseas experienced in May 2024 a substantial annual increase of 73.8 percent, reaching approximately $2.7 billion. In comparison, the remittances in May 2023 amounted to around $1.6 billion, as reported by the Central Bank of Egypt (CBE).
On a monthly basis, there was a 26.6 percent rise in remittances compared to April 2024, which saw a recorded amount of approximately $2.2 billion. The CBE attributed this surge in remittances to the implementation of a new economic reform package that Egypt initiated on March 6, 2024.
Read more: Egypt fulfills $25 billion debt obligations, representing 7 percent of GDP: IIF
Economic reforms
As part of these reforms, the CBE raised the overnight deposit rate, overnight lending rate, and the main operation rate by 600 basis points, resulting in rates of 27.25 percent, 28.25 percent, and 27.75 percent, respectively. Additionally, the discount rate was increased by 600 basis points to reach 27.75 percent.
Addressing dollar shortage
To address the scarcity of the US dollar, Egypt has taken several measures. Notably, they entered into an agreement with the United Arab Emirates (UAE) to develop the Ras El-Hekma zone, situated on the North Coast, which has an estimated value of $35 billion. Furthermore, the International Monetary Fund (IMF) approved Egypt’s request to augment the value of the current loan program by $5 billion.
International support
Various international financial institutions and development partners have also pledged their support to bolster Egypt’s economy. Additionally, the European Union has committed $8 billion over a three-year period, the World Bank Group has allocated $6 billion over three years, and the United Kingdom has contributed $400 million.
Attracting funds from overseas
Egypt has launched initiatives aimed at attracting the funds held by Egyptians working abroad back into the country, as part of their efforts to address the shortage of U.S. dollars in the local market. Moreover, according to the Central Agency for Public Mobilization and Statistics (CAPMAS), Egypt ranked sixth globally in terms of receiving remittances in 2023, with a total inflow of $11.09 million.
For more economy news, click here.
