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4 Chinese Projects Lower Dollar Price                                                                                                                   

Investment Momentum: 4 Mega Projects Could Lower the Dollar Price to EGP 45 by the End of 2025

Moharram Helal, head of the Egyptian Federation of Investors Associations and Institutions, expects the dollar price in Egypt to fall to EGP 45 by the end of this year, compared to approximately EGP 50.60 currently.

On the sidelines of his participation in a conference organized by the Egyptian Ministry of Finance to announce the results of the first package of tax incentives, Helal explained that there are four mega projects expected to be implemented in Egypt in the coming period, supporting his expectation of a decline in the exchange rate in his country.

"The four projects include the "massive investment opportunities expected to be implemented within the Ras El-Hikma project, another project Qatar plans to implement on the North Coast next month, a massive Chinese project on the North Coast near Ras El-Hikma, and a massive project by a Gulf state in Ras Shukheir," according to Hilal.

Hilal did not disclose further details about the anticipated Gulf projects in Ras Shukheir or the Chinese projects on the North Coast. Sources revealed to Bloomberg late last week that Qatar was in advanced talks to invest in a $3.5 billion tourism project on Egypt's Mediterranean coast. The same agency also revealed late last April that Kuwait was in advanced discussions to convert $4 billion of deposits in the Central Bank of Egypt into investments in the country.

In February 2024, the UAE's ADQ Holding acquired the development rights to the Ras El-Hikma project for $24 billion. This was in addition to transferring $11 billion of Emirati deposits in Egypt to be used for investments in major projects across Egypt, with the Egyptian government retaining a 35% stake in the Ras El-Hikma development project.

Days earlier, Egyptian President Abdel Fattah El-Sisi issued a decree transferring an area of ​​more than 174 million square meters in the Ras Shukheir area to the Egyptian Ministry of Finance for the issuance of land-backed sukuk to reduce public debt. The Ministry of Finance aims to use part of the Ras Shukheir land, located 350 kilometers southeast of Cairo on the Red Sea coast, as collateral for the issuance of sovereign sukuk, which will contribute to providing financing to cover the state's general budget needs under favorable terms.

Investment Momentum

The head of the Investors Union said that Egypt has been enjoying significant investment momentum recently, particularly from China, Turkey, and Eastern European countries. Helal expects the relocation of large factories from China to Egypt in the coming period, especially after the tariffs imposed by the administration of US President Donald Trump on various countries around the world.

"The tariffs imposed on Egypt give it priority in attracting Chinese investments targeting exports to the huge American market," according to Helal. He added that, in addition to China, Egypt receives dozens of inquiries daily from foreign investors seeking to implement new projects.

He added, "I believe that converting these inquiries into actual investments, along with the expected massive Gulf and Chinese investments, and the expected support package from the European Union worth €4 billion, will all increase the availability of foreign currency and lead to its decline against the Egyptian pound to 45 pounds. I can challenge everyone with this prediction by the end of the year."

A few days ago, the European Parliament approved the European Commission's provision of a total financial aid package to Egypt worth €4 billion, according to a post on the parliament's website. Egypt is awaiting the disbursement of another $1.2 billion, representing the fifth tranche of the International Monetary Fund loan, at the beginning of the current fiscal year.

The US dollar exchange rate has witnessed successive increases against the Egyptian pound since the start of the Iran-Israel conflict, exceeding EGP 50.70 in some Egyptian banks, after recording its lowest level in several months. Prior to the dollar's notable rise since the start of the escalating conflict between Israel and Iran, the US dollar had suffered successive losses against the Egyptian pound, losing approximately EGP 1.80 in May.