In light of the ongoing depreciation of the Egyptian currency, Reuters conducted an opinion survey on Thursday, and the findings indicated that Egypt’s inflation rate is rising steadily. The average annual urban consumer price inflation projection for the 13 analysts surveyed by the news agency was 33.6%.

The loss of billions of dollars from Egyptian debt instruments during the first quarter of last year put Egypt under intense pressure, forcing the Central Bank of Egypt to allow the value of the US dollar to increase relative to the Egyptian pound in the hopes of attracting foreign currency once more. As a result, the US dollar’s value relative to the Egyptian pound surged by more than 96%.

On Sunday, the Central Bank of Egypt announced that the interest rate on treasury bills had risen, reaching a new record high, exceeding 23%. However, the Egyptian government accepted only eight offers totalling about EGP 79 million. Banks offered to buy treasury bills worth 21.2 billion Egyptian pounds, while they asked for interest between 22.5% and 25.5%. Banking expert Hani Aboul Fotouh considered that the interest rate hike reflected the Central Bank of Egypt’s Monetary Policy Committee’s decision last month to raise interest rates to rein in inflation, expecting a further rise in interest rates. “Raising interest rates is reflected in lending and borrowing, including government requests to borrow from banks to finance the deficit between its expenditures and revenues,” he added.

A financial analyst, who declined to be named, said that the government is also using the bids to attract foreign investments in Egyptian debt instruments, allowing it to collect hard currency, even for a relatively limited time. “However, until now, foreigners’ appetite to invest in Egyptian debt instruments has not witnessed any improvement, given the rise in inflation locally to 32.9% last February, which means that the real interest rate is currently a negative value,” he said. “The problem is that the global interest rate is high, and Egypt has become a high-risk market.”