Good morning, friends. We have another packed issue for you this morning, so we’re going to jump straight in:

EGP WATCH- CIB will no longer allow clients to make FX-denominated purchases or withdrawals using debit cards linked to EGP accounts. The ban goes into effect tomorrow (Tuesday, 10 October), the bank said in text messages last night. AAIB and the Arab International Bank made similar moves in recent days, as we noted yesterday, as have other banks. No bank of which we’re aware has yet banned FX transactions on credit cards.

MEANWHILE- Policymakers are exploring other ways of convincing Egyptians living abroad to make fresh deposits in domestic banks, cabinet said in a statement after Prime Minister Madbouly met with central bank governor Hassan Abdalla, Suez Canal Authority chief Osama Rabie, and other officials. The statement gave no information on what we might expect. Previous initiatives have included everything from making it easier for Egyptians abroad to import cars to Egypt and settle military service obligations in cash to programs offering land and fresh incentives to foreign manufacturers

HAPPENING TODAY-

Will it be a big week on the reform front? The IMF and the World Bank will kick off their annual meeting in Morocco today, a week of talks that will likely serve as the backdrop to ongoing negotiations over the future of Egypt’s USD 3 bn loan program.

Devaluation will once again be on the agenda for policymakers, with IMF head Kristalina Georgieva last week warning that the further down the road we kick the decision, the more we will “bleed” our reserves. The IMF boss told Bloomberg last week that Egypt and the Fund are “making progress” on the twice-delayed review of our USD 3 bn assistance program. “In the last couple of days there have been some constructive engagements … Let’s see what will come out in the next weeks.”

ALSO HAPPENING TODAY- The Madbouly government is set to announce measures to curb food price inflation today, Ahmed Moussa said on Ala Masouleety (watch, runtime: 4:04). The steps, first teased in a cabinet statement last week, could see state companies and authorities flooding the market with nine basic commodities, including sugar, oil, rice, and dairy.

HAPPENING TOMORROW-

Inflation figures are out tomorrow,and analysts are predicting inflation will hit 38.3% in September, according to a poll by CNBC Arabia. Annual urban inflation has been accelerating for the past several months, hitting an all-time high of 37.4% in August.

The IMF’s World Economic Outlook is due out tomorrow — we’ll be looking for the institution’s Egypt growth forecast. The fund in July said it saw growth slowing to 3.7% this year from 6.6% in 2022, before inching up to 4.1% in 2024. Both the European Bank for Reconstruction and Development and commercial lender Intesa Sanpaolo have trimmed their Egypt growth forecasts this month. The World Bank, meanwhile, expects economic growth to slow to 3.7% in the current fiscal year, down from a projected 4.2% in FY 2022-2023, as we noted yesterday.

ELECTION 2023-

And then there were two: The Egyptian Social Democratic Party’s Farid Zahran has become the second candidate to file paperwork with the National Elections Authority (NEA) to run in December’s presidential poll, according to Youm7.President Abdel Fattah El Sisi was the first candidate to file his paperwork with a submission to the NEA on Saturday. At least four other politicians have said they are interested in running.

Key dates: Egyptians will go to the polls in December to elect a president for a new six-year term. Polls will be open at home on 10-12 December, while expats will vote on 1-3 December. The results will be announced on December 18, with a runoff in early 2024 if there is no clear winner.

MARKET WATCH-

Yields + Gaza to define life in the financial markets this week: An unprecedented sell-off in the global bond markets last week already had investors looking at the week ahead with trepidation, but the eruption of conflict in Gaza and Israel will likely fuel further volatility as geopolitical risks rise (more on this below).

This morning:

• Oil + gold up: Brent and US crude both jumped more than 5% in Asian trading this morning, while gold rose more than 1%.
• Equity futures down: US and European stock futures are both down this morning, with the S&P 500 0.8% in the red and the Nasdaq 100 down 0.7%.
• Asian shares in the red: Most exchanges in Asia opened the week in the red.
• Safe haven currencies gain: The USD and the JPY both gained ground against other major currencies.

Yes, but: Some analysts aren’t expecting the fighting to have much of an impact on financial markets beyond the immediate shock (provided the conflict doesn’t spread).

All eyes on the US bond market: Bond yields across developed economies soared to new multi-year highs last week on anxieties that central banks will be required to keep interest rates high over the long term to curb inflation. Expect more pressure on global stocks and the USD rally to extend if the sell-off continues this week.

None of this is good for emerging markets: The sharp rise in yields is bringing back concerns about emerging-market debt as investors exit the asset class for the US treasury market. Bloomberg reports that the sovereign debt of 21 countries is now trading at or near distressed levels, and ever higher rates in the US are putting access to the capital markets out of reach for more nations. EM bond funds have suffered almost USD 23 bn in outflows so far this year.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: There’s still a gap in special needs education in our private and international schools.