Good morning, wonderful people. We kick off this morning’s report with everyone’s favorite parlor game: Talk of a cabinet shuffle.

Is there a cabinet shuffle in the works? The usual post-election talk of a cabinet shuffle has begun, with well-connected MP and TV presenter Mostafa Bakry taking to the airwaves (watch, runtime: 6:48) to say he expects changes around the cabinet table just before or after the inauguration. The law permits President Abdelfattah El Sisi to shuffle his ministers before the inauguration — or after it, should he be reelected — Bakry explained.

When’s the inauguration? Bakry expects it on 3 April, saying that under constitutional amendments introduced in 2019, the president’s term lasts for six years from the date he last took the oath of office.

Adib wants more transparency: El Hekaya’s Amr Adib called on the Madbouly government to be more transparent and share updates on the anticipated cabinet shuffle. (watch, runtime: 1:30).

We’ll have election results tomorrow: The National Elections Authority (NEA) will hold a press conference at 2pm CLT to announce results of this month’s presidential poll, according to a statement. The domestic press has already called the election for President Abdel Fattah El Sisi. None of the candidates filed complaints about irregularities in the voting or counting process, the statement said.

TIGHTENING CARD LIMITS-

CIB has imposed further limits on the use of credit cards for FX spending: Credit card holders will only be allowed to spend EGP 7.75k worth of FX transactions a month while in Egypt, regardless of the number of credit cards they hold, the lender told users on Thursday. The restriction went into effect on Friday.

The bank does not appear to have made changes to spending limits for cardholders who travel abroad, saying in an fact sheet (pdf) that you need to reach out 3-7 days before traveling to activate your card — and reconcile with them within 90 days of that date.

It’s not clear whether other banks have taken similar measures, but given how in-sync the industry has been, we expect it will be only a matter of time before others follow suit.

Remember: The central bank in October capped FX spending inside Egypt for credit cards to the equivalent of USD 250 a month per card.

CRYSTAL BALL TIME-

#1- Analysts at HSBC now expect the USD to change hands for EGP 40-45 in 1Q 2024, compared to a previous forecast of 35-40, Asharq Business said in a post on X. HSBC thinks the Finance Ministry will separately need to tighten fiscal policy to offset record-high debt service costs. The official USD-EGP exchange rate has remained pegged at 30.96 since March. The USD is changing hands at 48-53 in the parallel market.

EGP 40-45 appears to be the consensus, suggesting the USD is overly strong on the prallel market. Fitch Solutions’ research unit BMI sees the EGP weakening to 40-45 against the greenback by the end of 1Q 2024. EFG Hermes lead MENA economist Mohamed Abu Basha sees the “EGP 40 mark [against the greenback] as being an eventual area of stability for the EGP when the FX market clears.”

Our IMF-borrowing threshold might get a USD 8 bn top-up after the lender approved a proposed 50% increase to borrowing quotas allocated to member countries, Al Borsa writes separately, quoting the same HSBC report.

#2- IIF forecasts 3.3% growth: The Institute of International Finance (IIF) sees Egypt’s economy growing 3.3% in the current fiscal year as record inflation, FX shortage, supply bottlenecks, and the impact of the conflict in Gaza curb both consumption and exports. The IIF also sees the country suffering from a USD 7 bn funding gap during the fiscal year 2023-2024, according to a report picked by Asharq Business.

That’s slightly below gov’t estimates: The Madbouly government has recently downgraded its growth forecast for the year to 3.5% from prior forecasts which put growth at 4.2%. Meanwhile, the IMF, the World Bank and S&P Global have all recently penciled in 3.5-3.7% growth in FY 2023-24.

The good news: The IIF sees the IMF restarting its long-stalled review of our USD 3 bn loanprogram in the beginning of 2024 on the back of the widely anticipated post-election EGP devaluation and shift to a flexible exchange rate. There has been recent chatter that the IMF could as much as quadruple its assistance package, which would give policymakers the firepower needed to properly float the EGP.

HAPPENING TODAY-

#1- Negotiators take another crack at the GERD: Representatives from Egypt, Ethiopia, and Sudan were back at the table yesterday for another round of talks aimed at breaking the deadlock over the filling and operation of the Grand Ethiopian Renaissance Dam (GERD) in Addis Ababa. Discussions continue through tomorrow; it’s the fourth round since President Abdel Fattah El Sisi and Ethiopian Prime Minister Abiy Ahmed agreed to restart negotiations in July.

#2- Sugar export ban extended: The Trade Ministry has extended for three months its ban on the export of sugar, according to a decision published in the Official Gazette. The ban, which runs through March 2024, exempts surplus quantities beyond local market needs. The ministry has also stepped up warnings to wholesalers and retailers against hoarding and price gouging as it looks to calm soaring prices.

#3- MoIC launches digital platform to support the private sector: The International Cooperation Ministry will launch a digital platform to provide financial and technical support to private sector companies. The platform will be dubbed Hafez.

HAPPENING THIS WEEK-

#1- It’s interest rate week: The CBE’s Monetary Policy Committee will meet on Thursday to review rates. Our poll of analysis sees the bank leaving rates on hold.

#2- Palestine lights up the silver screen: El Gouna Film Festival continues this week with a special program spotlighting Palestinian narratives — Windows on Palestine — in collaboration with the Palestine Film Institute. The gathering wraps up on Thursday.

** EnterprisePM has a run-down of the most notable films at the festival.

THE BIG STORY ABROAD-

Kuwait’s ruling emir, Sheikh Nawaf Al Ahmad Al Sabah, died yesterday at age 86, according to a Kuwaiti cabinet statement. The emir had been admitted to hospital for an emergency health problem at the end of November. Al Sabah’s half-brother, Crown Prince Sheikh Mishal Al Ahmad Al Sabah, has been announced as the new emir, the statement said. Egypt has declared a three-day mourning period, Ittihadiya said. (New York Times | Financial Times | France24 | CNN | AP | Reuters)

Israel’s war in Gaza continues to dominate front pages around the world. The AP looks at how Gazans prepared to observe Christmas. Reuters and Bloomberg are looking at the latest from Netanyahu, while the Washington Post is breaking down what Biden’s support of Israel could mean for US foreign policy. We have the latest on Gaza in the news well, below.

At least 61 people have drowned off the coast of Libya, with women and children among the dead, the International Organization for Migration writes. The boat full of migrants heading for Europe is believed to have left from Zwara, west of Tripoli, near the border with Tunisia.

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