Good morning, wonderful people. It’s yet another brisk morning here in Egypt as we race to the end of the first week of Ramadan, so strap yourself in and let’s get this show on the road.

BUT FIRST: Did you know you can bookmark stories to read later on our newlyrelaunched website? Our new home on the web looks cool, loads fast, and has a raft of new features, from deep dives into topic pages, story tags to let you follow the issues and companies that matter most, to an audio feature so you can listen to our news on the go. Have a suggestion or want to report a bug? Hit reply to this email.

MORNING MUST-READ- Do you have AI angst? You’re not alone. Worth checking out this morning is the New York Times’ “Tinkering with ChatGPT, workers wonder: Will this take my job?” Start with that and then jump into its weeklong series of primers on AI.

SO, WHEN DO WE EAT? We’ll be breaking our fasts this evening at 6:12pm CLT and you’ll have until 4:20am tomorrow to hydrate and have a bite to eat.

Tomorrow is interest rate day: The Central Bank of Egypt will meet tomorrow to review interest rates. Six of seven analysts we polled expect the Monetary Policy Committee to hike rates by at least 200 bps as it tries to tamp down on inflation and boost FX liquidity amid continued pressure on the EGP. A Reuters poll out earlier this week sees a median forecast 200-bps hike, while seven of 15 pundits surveyed expect a rise of 300 bps.

But is it also devaluation day? Widening USD rates in the parallel and derivatives markets suggest the EGP may need to devalue against the greenback, according to analysts speaking to Reuters, some of whom expect a move coinciding with the MPC meeting on Thursday. “No time like the present to align foreign exchange rates with fundamentals,” said Gergely Urmossy, EM strategist at Societe Generale, who described this week’s meeting as “one of the most anticipated events in the African frontier space.”

The USD is currently trading at EGP 35-36 on the parallel market, while 12-month non-deliverable forwards are pointing to EGP 40, according to the newswire. The official rate has held at 30.96 for almost three weeks.

Between a rock and a hard place: “Egypt's options have narrowed to a simple choice: either improve the foreign exchange supply picture through asset sales and reforms, or bring down demand for hard currency through further painful adjustment,” Goldman Sachs MENA economist Farouk Soussa said.

But devaluation isn’t a panacea: “Another devaluation is widely expected, but by itself, we do not see it bringing in much needed capital inflow,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank, echoing a Morgan Stanley note published this week. “There needs to be meaningful signs of reform progress to help start rebuilding investor confidence, including a truly flexible EGP, tighter monetary policy, and the privatization program,” she said, predicting the EGP to fall to 36-38 to the USD.

Remember: The central bank committed to maintaining a “durably flexible” exchange rate under the USD 3 bn loan program agreed with the IMF in October. Fund officials were due to visit Egypt earlier this month to conduct their first review of the program but are still yet to set a date.

This would be round four: The central bank has devalued the currency three times over the past year in a bid. The EGP has lost almost half of its value against the greenback since last March, when Russia’s invasion of Ukraine triggered the flight of hot money from emerging markets including Egypt.

HAPPENING TODAY-

Climate talks wrap in Luxor today: The committee set up to move forward the landmark loss and damage fund agreed at last year’s COP27 summit is holding its first meeting in Luxor. The three-day talks wrap up today. Representatives from 33 developing and developed countries are attending the talks, which are being led by Egypt’s top climate negotiator, Amb. Mohamed Nasr.

Want the rundown on what happened in Luxor yesterday? Check out thismorning’s edition of Enterprise Climate.

Cambodian Deputy Prime Minister and Foreign Minister Prak Sokhonn is in Cairo today and tomorrow for talks. Sokhonn is arriving in Egypt from Morocco.

HAPPENING THIS WEEK-

We can expect to get our first proper look at the state’s spending plans for the coming fiscal year when the Finance Ministry delivers the draft FY 2023-2024 budget to the House of Representatives.

THE BIG STORY ABROAD-

There are a handful of stories dominating the front pages of the global business press this morning:

#1- Another day, another crypto bro under fire: FTX’s Sam Bankman-Fried has been accused of paying at least USD 40 mn in bribes to a Chinese official in hopes of having the accounts of his hedge fund, Alameda, unfrozen. The bribery charge comes on top of a hefty list of criminal charges he is already facing after the collapse of his cryptocurrency exchange FTX last year. (Reuters | AP| Bloomberg| CNBC| The Guardian | BBC | CNN | Financial Times)

#2- JPMorgan boss deposed in Epstein lawsuits: JPMorgan CEO Jamie Dimon will be summoned for a sworn deposition in May as part of investigations into the bank’s relationship with late [redacted] offender Jeffrey Epstein and its decision to keep him as a client. JPMorgan, which had Epstein as a client for more than a decade, is facing two separate lawsuits alleging that it turned a blind eye to his illegal activities and benefited from human trafficking. (Reuters | Bloomberg | Financial Times | Wall Street Journal | CNBC)

We are delighted to share with you that the Enterprise Exports & FDI Forum will be taking place on Monday, 15 May at the Four Seasons Hotel at Nile Plaza.

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*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We profile the EGP 300 bn project to reclaim desert land next to the Nile Delta.

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