Egypt raises minimum wage 50% amid fears devaluation of pound, high inflation

The Egyptian presidency yesterday announced that the minimum wage will be raised by 50 per cent to 6,000 Egyptian pounds ($194) starting next month, amid fears of a new devaluation of the Egyptian pound and expectations of high inflation in the country.

The new trends come at a time when Egypt is witnessing a decline in the value of the pound. Some analysts said that the Central Bank of Egypt’s interest rate hike by 200 basis points last week may indicate a possible devaluation of the currency.

The Egyptian pound, whose official rate has been fixed at 30.85 Egyptian pounds to the dollar since March last year, was trading on the black market at 71 pounds to the dollar earlier this month.

The social package announced by the presidency included raising the tax exemption limit on annual incomes from 45,000 pounds ($1,455) to 60,000 pounds ($1,940), in addition to increasing allowances for beneficiaries of the Takaful and Karama programmes – which provide monthly cash support to the poorest families – by 15 per cent each a month.

The decisions also included increasing the incomes of workers in the state and economic bodies, starting from March, with a minimum ranging between 1,000-1,200 pounds ($32-$39), in addition to raising the minimum wage by 50 per cent.

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