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Egypt Receives $2Bn from European Investment Bank

The logo of the European Investment Bank is pictured in the city of Luxembourg
The logo of the European Investment Bank is pictured in the city of Luxembourg
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Egypt Receives $2Bn from European Investment Bank

The logo of the European Investment Bank is pictured in the city of Luxembourg
The logo of the European Investment Bank is pictured in the city of Luxembourg

The European Investment Bank’s (EIB) board has approved an outline finance worth €1.9 billion ($2.17 billion) for Egypt to finance projects in transport and to support the small and medium-sized enterprises (SMEs) sector, Minister of International Cooperation Rania al-Mashat announced on Sunday.

In a press statement, Mashat said the loan provides €1.1 billion for the National Authority for Tunnels (NAT) to implement three projects and allocates €800 million for the National Bank of Egypt (NBE) to back SME projects in countering the impact of COVID-19.

For the €1.1 billion loan, Mashat clarified that it supports the vital Egyptian transport sector, which contributes 4.6 percent to Egypt’s GDP and provides about 6.2 percent of job opportunities in the domestic market.

She added that the railways serve 500 million passengers annually on average, adding that the current project portfolio in the Egyptian transport sector records five billion dollars, covering 30 projects financed by the EIB, the World Bank Group, the European Bank for Reconstruction and Development (EBRD), in addition to Japan, China, Korea and France.

The new loans came as a result of the EIB’s mission visit in February, headed by EU Neighboring Countries at EIB Flavia Palanza, Mashat noted.

She said both sides discussed strategic partnership, affirming that various projects have been implemented in several sectors to support social and economic development and create job opportunities.

The EIB has introduced total finances worth around €9.7 billion since the start of the bilateral strategic partnership in 1979, while the ongoing portfolio records €2.3 billion, she stated.

According to Mashat, Egypt and the EIB agreed together through a joint statement to improve cooperation in new sectors that contribute to promoting comprehensive economic growth and private sector development.

She added that this would also contribute to the implementation of Egypt’s Vision 2030 and is consistent with the United Nations Sustainable Development Goals (SDGs).

On February 8, Egypt welcomed the EIB visiting mission, which resulted in inking a joint agreement outlining five pillars of future cooperation.

These included backing the funding of the public and private sectors, expanding the finances for the projects to provide cleaning water, sewage system, energy, transport and SMEs, as well as supporting the fight against climate change and mitigating their consequences alongside promoting the health and education sectors.

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Dollar Resumes Upward Trend, Euro Hits Lowest since Nov 2022

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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Dollar Resumes Upward Trend, Euro Hits Lowest since Nov 2022

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

The dollar hit new multi-month highs against the euro and the pound on Thursday, the first day of 2025 trading, as it built on last year's strong gains on expectations US interest rates will remain high relative to peers.

The euro fell to as low as $1.0314, its lowest since November 2022, down around 0.3% on the day. It is now down nearly 8% since its late September highs above $1.12, one major victim of the dollar's recent surge.

Traders anticipate deep interest rate cuts from the European Central Bank in 2025, with markets pricing in at least four 25 basis point cuts, while not being certain of even two such moves from the US Federal Reserve, Reuters reported.

The dollar was hitting milestones across the board and the pound was last down 0.65% at $1.2443, its lowest since April, with its fall accelerating after it broke through resistance around $1.2475.

"It's more of the same at the start of the new calendar year with the dollar continuing to extend its advances in anticipation of Trump putting in place friendly policies at the start of his term," said Lee Hardman, senior currency analyst at MUFG.

US President-elect Donald Trump's policies are widely expected to not only boost growth but also add to upward price pressure. That will lead to a Fed cautious about cutting rates too much further, in turn underpinning US Treasury yields and boost dollar demand.

A weaker growth outlook outside the US, conflict in the Middle East and the Russia-Ukraine war have also added to demand for the dollar.

The dollar also reversed an early loss on Thursday to climb against the Japanese yen, and was last up 0.17% at 157.26.

It reached a five-month high above 158 yen in late December, potentially putting pressure on the Bank of Japan, which is expected to raise interest rates early this year, but possibly not immediately.

"If dollar/yen were to break above 160 ahead of the next BOJ meeting, that could be a catalyst for the BOJ to hike in January rather than wait until March," said Hardman.

"Though for now markets are leaning towards March after the dovish comments from (governor Kazuo) Ueda at his last press conference."

Even those who are more cautious about sustained dollar strength think it could take a long time to play out.

"The dollar may be vulnerable – but only if the US data confound market expectations that the Fed doesn’t cut rates more than once in the first half of this year, and not by more than 50bp in the whole of 2025," said Kit Juckes chief FX strategist at Societe Generale in a note.

"There's a good chance of that happening, but it seems very unlikely that cracks in US growth will appear early in the year – hence my preference for taking any bearish dollar thoughts with me into hibernation until the weather improves."

China's yuan languished at 14-month lows as worries about the health of the world's second-biggest economy, the prospect of US import tariffs from the Trump administration and sliding local yields weighed on investor sentiment.

Elsewhere, the Swiss franc, another victim of the recent dollar strength, gave back early gains to last trade flat at 0.90755 per dollar.

The Australian and New Zealand dollars, however, managed to break away from two-year lows touched on Tuesday. The Aussie was 0.36% higher at $0.6215 having dropped 9% in 2024, its weakest yearly performance since 2018.

The kiwi rose 0.47% to $0.5614.