CAIRO: Egyptian President Abdel Fattah El-Sisi said Thursday his country was in an economic “state of near-emergency” as a result of the Middle East war, warning of runaway inflation.
The Arab world’s most populous nation has not been physically impacted by the US and Israeli war with Iran, which has seen strikes on Egypt’s wealthy Gulf allies and paralyzed trade through the vital Strait of Hormuz.
But by the close of business Thursday, the Egyptian pound had fallen to an eight-month low against the US dollar, trading at 50.2 to the USD amid reports of short-term investment outflows.
Egypt’s import-dependent economy has proven highly sensitive to fluctuations in the currency, which has lost two-thirds of its value since 2022.
At a military academy event, El-Sisi said “the current crisis might have some repercussions on prices,” warning that price-gouging traders could be tried “in military courts,” according to a statement from his spokesman.
Over the weekend, El-Sisi had warned the war could spell trouble for the Suez Canal, the region’s other vital waterway besides the Strait of Hormuz and a key source of foreign currency for Egypt.
Major shipping companies have already directed traffic away from the region, rerouting around the Cape of Good Hope off the tip of southern Africa.
El-Sisi said Thursday that Egypt was attempting “sincere and honest mediation efforts to stop the war, as its continuation will have a hefty toll.”
Cairo has in the past hosted nuclear talks between Iran and the International Atomic Energy Agency, and is a guarantor of the US-brokered Gaza peace deal between Israel and Hamas.
But Iranian Foreign Minister Abbas Araghchi said Thursday his country was “not asking for a ceasefire” or negotiations with the US.