News February 24, 2024 at 5:55 pm

After Weeks Of Speculations: Here’s The Full Story Of Ras El Hikma Deal

ByMalak Nazir

Egypt’s Economic Leap: The Ras El Hikma Development Deal

Egypt has inked a groundbreaking $35 billion development deal with the Abu Dhabi Developmental Holding Company PJSC (ADQ) for the Ras El Hikma city project, announced by Prime Minister Mostafa Madbouly. This ambitious partnership aims to attract up to $150 billion in investments, create millions of jobs, and significantly boost the Egyptian economy.

The financial arrangement includes a $35 billion payment to Egypt within two months, bolstered by an $11 billion deposit from the UAE into the Egyptian Central Bank and an additional $24 billion investment in the project. Egypt stands to gain 35% of the project’s profits,alongside commitments to compensate current land residents.

This deal is a strategic move to reduce Egypt’s external debt by $11 billion by converting the Emirati deposit into an investment. It arrives at a critical time for Egypt, grappling with foreign currency shortages and inflation challenges. The agreement aligns with Egypt’s nearing completion of a deal with the International Monetary Fund (IMF), further stabilizing its economic landscape.

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Sudden Collapse in Dollar Price to Less Than EGP50

The process of the dollar’s decline in the black market accelerated during today’s trading coinciding with a series of downturns that hit the currency in the parallel market after the announcement of the Ras el Hikma Sovereign Deal, worth $35 billion. This drop was also fueled by reduced demand for the US currency. Thanks to government initiatives injecting fresh dollar liquidity into the state treasury to address Egypt’s dollar crisis.