Sissi says Egypt in ‘state of near-emergency’ as war threatens economy

Egyptian President Abdel-Fattah el-Sissi says his country is 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 paralysed 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, Sissi says “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, Sissi 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.

Sissi says that Egypt is 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 ceasefire deal between Israel and Hamas.

But Iranian Foreign Minister Abbas Araghchi said earlier today that his country is “not asking for a ceasefire” or negotiations with the US.