How Regional War Is Threatening Egypt’s Economy, According to El-Sisi
CAIRO — Egyptian President Abdel Fattah El-Sisi said Thursday his country faces an economic “state of near-emergency” as the Middle East war sends shockwaves through the nation’s finances, warning of runaway inflation and calling for tough measures against price-gouging traders.
The Arab world’s most populous nation has remained physically untouched by the US and Israeli war with Iran — a conflict that has struck Egypt’s wealthy Gulf allies and paralyzed trade through the Strait of Hormuz. Yet the economic fallout has arrived at Egypt’s doorstep.
By Thursday’s close, the Egyptian pound had fallen to an eight-month low against the US dollar, trading at 50.2 to the dollar amid reports of short-term investment outflows. Egypt’s import-dependent economy has shown acute sensitivity to currency fluctuations, having lost two-thirds of its value since 2022.
Warning on Prices
Speaking at a military academy event, El-Sisi addressed the growing economic pressures.
“The current crisis might have some repercussions on prices,” he said, warning that traders who exploit the situation through price-gouging could be tried “in military courts,” according to a statement from his spokesman.
The president’s remarks signal growing concern within the government about public anxiety over rising costs as the regional conflict disrupts normal economic patterns.
Suez Canal at Risk
Over the weekend, El-Sisi had raised alarms about the Suez Canal — the region’s other vital waterway alongside the Strait of Hormuz and a critical source of foreign currency for Egypt.
Major shipping companies have already begun diverting traffic away from the region, rerouting vessels around the Cape of Good Hope off southern Africa’s tip. Such diversions, if sustained, could deal a heavy blow to canal revenues that Egypt depends upon.
Mediation Efforts
El-Sisi said Thursday that Egypt was pursuing “sincere and honest mediation efforts to stop the war, as its continuation will have a hefty toll.”
Cairo has previously hosted nuclear talks between Iran and the International Atomic Energy Agency and serves as a guarantor of the US-brokered Gaza peace deal between Israel and Hamas.
However, Iranian Foreign Minister Abbas Araghchi signaled Thursday that Tehran was “not asking for a ceasefire” or negotiations with the United States, suggesting the conflict could continue with mounting economic consequences for countries throughout the region.
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