2023-08-16 20:36:16
Trading in the Egyptian stock market is approaching its highest levels, at a time when local investors are seeking to protect their savings from inflation, which has reached record levels, according to Bloomberg.
The agency’s report indicated that what the Egyptian Stock Exchange is witnessing is a common pattern this year in all developing countries that are facing economic crises and a deterioration in the value of the currency.
The EGX 30 index has jumped more than 70 percent in the Egyptian local currency since October, and is about to pass its 2018 peak, according to the agency.
For foreign investors, the report explains, their gains may be completely wiped out if they convert to US dollars, but the stock market represents a somewhat safe haven for the analyst population. Egyptian investors account for about 85% of the value of trading this year, according to data from the stock exchange that exclude deals.
Retail traders traded 40 billion pounds ($1.3 billion) worth of stocks in July alone, more than any other investing group during that month.
Annual inflation rose in Egypt in June to a record level of 36.8 percent, driven by the high price of food in a country experiencing a severe economic crisis as a result of a shortage of foreign exchange, according to official data published in early July.
The annual inflation rate was 14.7 percent in the same month last year.
The government agency attributed one of the reasons for this increase to “the food and beverage section registering an increase of 64.9 percent,” in a country that imports most of its basic needs from abroad.
Previously, the highest inflation rate was recorded in Egypt in July 2017, when it reached 34.2 percent.
This record rate was recorded in the wake of a decision by the Central Bank to devalue the local currency against the US dollar in fulfillment of one of the conditions of the International Monetary Fund to obtain a loan from it.
The Egyptian economy suffers from the repercussions of years of political crises, security tremors and violence, followed by the Covid pandemic and today the effects of the Ukrainian war, as Russia and Ukraine are the main countries from which Egypt used to import wheat, and they were also a major source for tourists visiting the country of the Nile.
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