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Red Sea Crisis May Trigger Egyptian Currency Devaluation, Warns S&P

Egypt may soon be pushed to further devalue its currency due to fallout from attacks on shipping in the Red Sea, S&P Global Ratings warned this week. The agency expects authorities could slash the pound's value against the dollar from 31 to around 60 - closer to volatile black market rates.

"Egypt's already tight foreign currency reserves are taking a major hit from plunging Suez Canal revenues," said S&P credit analyst Omar Shaaban. "Canal income is critical for Egypt, usually contributing nearly 8% of government revenue."

Increased exchange rate flexibility is a key tenet of Egypt's $3 billion IMF bailout program. S&P believes that subject to currency devaluation, the IMF may release loan disbursements and potentially extend the program. A clearer exchange rate policy could also spur remittance inflows and aid trade and growth, S&P noted.

Red Sea Crisis May Trigger Egyptian Currency Devaluation, Warns S&P Egypt may soon be pushed to further devalue its currency due to fallout from attacks on shipping in the Red Sea, S&P Global Ratings warned this week.

IMF Extends $941 Million Loan to Aid Kenya's Economic Struggles

The International Monetary Fund (IMF) malhas given Kenya the green light for a fresh loan exceeding $941 million, aimed at stabilizing the nation's fragile financial state. Kenya grapples with economic challenges like soaring debt, escalating inflation, and a weakening currency.

The IMF said in a statement on Wednesday that the credit of $941.2 million for Kenya had been approved by its executive board. $624.5 million of this total will be distributed right now. Kenya has borrowed around $2.6 billion from the IMF overall with this most recent loan.

Antoinette Sayeh, IMF Deputy Managing Director and Acting Chair, remarked, "Kenya's growth has remained resilient despite mounting external and domestic challenges." She emphasized that the credit arrangements aim to support efforts to maintain macroeconomic stability, reinforce policy frameworks, withstand external shocks, advance key reforms, and promote inclusive and environmentally sustainable growth.

According to recent Treasury data, Kenya's public debt stands at 10.585 trillion shillings ($65.5 billion). In December, the country opted out of repurchasing a portion of a $2 billion Eurobond set to mature in June, instead paying $68.7 million in interest to avoid a potential default.

"In its unwavering commitment to upholding a resilient sovereign credit rating and facilitating access to new development financing, Kenya remains dedicated to fulfilling all debt obligations with international lenders," Ndung'u stated.

President William Ruto previously pledged to buy back $300 million of the Eurobond, admitting public debt had "become a source of much concern to citizens, markets and our partners."

To raise revenues, Ruto has introduced unpopular new or higher taxes, sparking legal challenges. With rising living costs squeezing households, the taxes have provoked widespread public outcry.

Read more: https://bit.ly/3SApt4K

IMF Extends $941 Million Loan to Aid Kenya's Economic Struggles Discover how the IMF is helping Kenya with a $941 million loan to tackle economic challenges. Read more to learn about Kenya's financial boost.

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IMF Predicts 4.3% Growth In Burundi’s Economy

The International Monetary Fund (IMF) predicts a 4.3% boost in Burundi's economy this year, up from 2.7% in 2023.

In their statement on Monday, the explained that this growth is expected due to strong , productive investments, and ongoing . They also noted that fuel shortages held back economic activity last year.

Burundi, population of 12 million, relies heavily on income from farming, especially tea, and coffee. In 2022, the Russian-Ukrainian conflict impacted Burundi, causing inflation and spiking food and fuel prices.

By the end of 2023, Burundi's reserves were $96.4 million, covering only 0.8 months of .

The economy faced a foreign currency shortage after a 2015 political crisis when donors suspended aid. But now The European Union resumed , and the United States committed to .

The IMF mentioned that relief came from remittances and .

Read more: https://bit.ly/48MGQEW

Imf Predicts A 4.3% Growth In Burundi’s Economy The International Monetary Fund (IMF) predicts a 4.3% boost in Burundi's economy this year, up from 2.7% in 2023.