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Egypt approves extra $5.4bn in current budget for social care

REUTERS/Amr Abdallah Dalsh
Egyptian Nubian women carry traditional wooden puppet souvenirs, as they wait for tourists, at the Gharb Soheil village in Aswan city on March 8, 2023

Egyptian President Abdel Fattah al-Sisi has approved additional budget spending of EGP165 billion ($5.4 billion) for this fiscal year ending in June, local media reported on Friday, citing the official gazette.

The additional money was allocated for wages, subsidies and grants, and for social benefit spending, state-owned newspaper Al Ahram reported.

Egypt is facing economic repercussions from the war in Ukraine, “which added to the commitments of the state valued at about EGP165 billion,” parliament said in a statement earlier this month after it approved a draft law for the extra spending.

In particular, the country is struggling with rising costs of grain and fuel imports.

Since last March, the Egyptian pound’s official exchange rate has fallen by almost half to around 30.87 pounds per dollar after Russia’s invasion of Ukraine exposed vulnerabilities in the country’s finances.

The Central Bank of Egypt raised its overnight interest rates by 200 basis points (bps) on March 31 following a meeting of its monetary policy committee, saying it aimed to bring high inflation into check.

The bank set the lending rate at 19.25 percent and the deposit rate at 18.25 percent.