Egyptian Pound Stable After Devaluation, IMF Deal 

A deliveryman balances a tray of freshly baked bread while riding his bicycle along the al-Darb al-Ahmar district in the old quarters of Cairo on March 6, 2024. (AFP)
A deliveryman balances a tray of freshly baked bread while riding his bicycle along the al-Darb al-Ahmar district in the old quarters of Cairo on March 6, 2024. (AFP)
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Egyptian Pound Stable After Devaluation, IMF Deal 

A deliveryman balances a tray of freshly baked bread while riding his bicycle along the al-Darb al-Ahmar district in the old quarters of Cairo on March 6, 2024. (AFP)
A deliveryman balances a tray of freshly baked bread while riding his bicycle along the al-Darb al-Ahmar district in the old quarters of Cairo on March 6, 2024. (AFP)

Egypt's currency was stable at around 49.5 pounds to the dollar as the market opened on Thursday, a day after the central bank let the currency plunge and pledged to shift to a more flexible exchange rate system as the country secured an expanded $8 billion program with the International Monetary Fund.

The pound stayed in the same range it had settled at near closing on Wednesday, LSEG data showed. Before Wednesday's devaluation and a steep interest rate hike, the central bank had held the currency for about a year at just under 31 pounds to the dollar.

A more flexible exchange rate, long a key demand from the IMF, is seen as crucial for restoring investor confidence in an economy that has been hobbled for the last two years by a foreign currency shortage.

Egypt has promised such a move in the past, only to resume holding the currency at a fixed rate.

The central bank says sufficient funding has been secured to ensure foreign exchange liquidity. Its governor told reporters on Wednesday that it would still have the ability to intervene, as in other countries, in the case of "illogical movements".

The IMF, which agreed to add $5 billion to its existing $3 billion loan program with Egypt, has said it is looking for a sustainable, unified, and market determined exchange rate.

Under the program, Egypt has committed to undertake structural reforms to stabilize prices, manage the debt burden and encourage private-sector growth.

The pound's de-facto devaluation and the agreement with the IMF come two weeks after Egypt signed a deal with Emirati sovereign fund ADQ that it said will bring $35 billion of investments over two months, including the conversion of $11 billion in existing deposits.

The foreign currency shortage has curbed local business activity and led to backlogs at ports and delays in commodity payments.

Remittances from Egyptians working abroad, the country's top single source of foreign currency, slowed sharply last year amid expectations that the pound would fall.

Since early 2022, when the foreign currency shortage worsened, the pound has now lost more than two-thirds of its value against the dollar in a series of staggered devaluations.



Air France-KLM to Take Majority Stake in Scandinavian Airline SAS

(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)
(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)
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Air France-KLM to Take Majority Stake in Scandinavian Airline SAS

(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)
(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)

Air France-KLM plans to increase its stake in Scandinavian airline SAS to 60.5%, the latest step towards consolidating Europe's fragmented airline sector as carriers seek to strengthen their position against rivals.

The Franco-Dutch airline group said on Friday it intended to increase its stake from 19.9% currently by acquiring the stakes held by top shareholders Castlelake and Lind Invest.

The purchase, subject to regulatory clearances, is expected to close in the second half of 2026, Reuters quoted Air France-KLM as saying.

The value of the investment would be determined at closing, based on SAS's latest financial performance, including core earnings (EBITDA) and net debt, the company said. It declined to give details on those metrics.

Air France-KLM expects to generate "three-digit million" euros in synergies from raising its SAS stake, Air France-KLM finance chief Steven Zaat told analysts on a call.

Zaat said the deal would be funded from cash or a "plain vanilla bond" and would not impact the drive to reduce the group's hybrid debt. "We have ample room for it," he said.

Air France-KLM shares were flat in early trading.

JPMorgan analysts said there were reasons to be positive about the deal.

"SAS offers deeper access to a GDP-rich region in Scandinavia, there will now be an opportunity to unlock cost synergies as SAS becomes a subsidiary of the group," they said in a note, adding that "industry consolidation should also be viewed positively for the whole sector, even if not game-changing in terms of size."

INDUSTRY CONSOLIDATION

SAS welcomed Air France-KLM's announcement.

"European consolidation had to happen further, and we're very happy to be part of that," SAS CEO Anko van der Werff told Danish broadcaster TV2.

"In the current setup where Air France-KLM is a 19.9% shareholder, they're still a competitor," he said. "With the new stake, going above 50%, we can really tap into all of those synergies and offer those benefits to customers."

SAS said it would continue to invest in its fleet and network.

In 2023, Air France-KLM said it would invest about $144.5 million for its initial SAS stake, boosting its presence in Sweden, Denmark and Norway with the option to become a controlling shareholder after a minimum of two years, subject to conditions.

SAS exited from Chapter 11 bankruptcy protection in August last year.

The two carriers have already had a commercial cooperation since summer 2024. Control of SAS would allow Air France-KLM to expand in the Scandinavian market and create additional value for shareholders, Air France-KLM said in a statement.

"Following their successful restructuring, SAS has delivered impressive performance, and we are confident that the airline's potential will continue to grow through deeper integration within the Air France-KLM Group," said Air France-KLM CEO Ben Smith.

The deal comes as executives seek more consolidation in Europe's fragmented airline industry, which they say is needed to compete with US and Middle Eastern rivals.

Earlier this year, Germany's Lufthansa bought a 41% stake in Italy's ITA Airways and a stake in Air Baltic. The Portuguese government is looking to privatize its national carrier TAP.

Lufthansa and Air France are also in talks about buying a stake in Spain's Air Europa.
SAS has 138 aircraft in service and carried more than 25 million passengers last year, generating revenues of 4.1 billion euros ($4.8 billion).

Air France-KLM group would have a majority of seats on the board of directors, while the Danish state will keep its 26.4% stake in SAS and its seats on the board.