Browsing: Suez Canal

• • (CBK) retained its base lending rate at a high of 13 per cent for the second time.
  • This is the highest rate in 12 years, as the apex bank continues implementing monetary policies to manage stubborn inflation.
  • According to CBK data, the country’s borrowers had defaulted on about $4.8 billion as of April, the highest in 18 years, due to the tough credit market.

  Central Bank of Kenya (CBK) retains high interest rates

  Central Bank of Kenya (CBK) retained its base lending rate at a high of 13 per cent for the second time driving the borrowing costs in Kenya to remain high for at least the next two months.This is the highest rate in 12 years, as the apex bank continues to implement monetary policies intended to manage the stubborn inflation, which slightly increased to 5.1 per cent last month from five per cent in April.

• The base-lending

• Red Sea shipping disruptions by Houthi rebels stemming from the Israel -Palestine dispute in the Gaza Strip.
• Simultaneously, transits around the Cape of Good Hope are up by a nearly similar amount in the same period.
• Since the first attack in November last year, data shows the numbers have risen to about 68 as of March 12.

The East African region is still at risk of future global shocks as continued Red Sea shipping disruptions and attacks on cargo vessels by Houthi rebels could likely dent the current ease in the cost of living in Kenya, with analysts predicting an increase in fuel prices.

This is likely to negate the calmness in inflation witnessed in the past three months, when the country recorded a decline in fuel and some food item prices, bringing down the level of inflation to 5.7 per cent in March.

The attacks that are stemming from …

• The IMF has approved an expansion of the original economic rescue program for Egypt by $5 billion.
• Spillovers from the recent conflict in Gaza and Israel aggravated the shaky economic situation in Egypt.
• Egypt has recently taken difficult but necessary reforms to correct the country’s microeconomic imbalance.

IMF’s Economic Rescue Program for Egypt

The Executive Board of the International Monetary Fund (IMF) has completed the first and second reviews of Egypt’s Extended Fund Facility (EFF)arrangement, approving an expansion of the original economic rescue program by $5 billion.

The IMF had initially approved a $3 billion loan in December 2022 but has …

• UNCTAD estimates that the weekly transits going through the Suez Canal decreased by 42 per cent over the last two months.
• The ongoing conflict in Ukraine has triggered substantial shifts in oil and grain trades, reshaping established trade patterns.
• Simultaneously, the Panama Canal, a pivotal conduit for global trade, is grappling with diminished water levels, resulting in a staggering 36 per cent reduction in total transits over the past month compared to a year ago.

The escalating geopolitical tensions and climate change related issues affecting key shipping routes are now threatening global trade, the United Nations Conference on Trade and Development (UNCTAD) has warned, with potential to curtail economic development mainly in poor countries.

The United Nations trade and development body has expressed concerns over the disruptions, particularly stemming geopolitical tensions affecting shipping in the Black Sea, recent attacks on shipping in the Red Sea affecting the Suez …

• Major shipping lines among them Mediterranean Shipping Company (MSC) and Maersk have been avoiding the Red Sea and the Suez Canal route.
• This move follows attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships travelling to Israel.
• The Houthis have declared their support for Hamas in the ongoing war Israel war in Gaza that erupted following October 7 Hamas attacks.

The East African region remains exposed to high freight costs even as shipping lines indicate they are resuming voyages through the Red Sea after a hitch in December, caused by attacks by Houthi rebels.

Major shipping lines, including the world’s leading container carrier, the Mediterranean Shipping Company (MSC), and the second-placed Maersk, have been avoiding the Red Sea and the use of the Suez Canal.

This decision came after persistent attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships traveling towards Israel.…

According to the United Nations, water transports approximately 80 per cent of the total international trade volume. The Suez Canal has cemented its importance in the world.

The waterway transports approximately 12 per cent of global trade. 7 per cent of the world’s oil passes through the connection between the Mediterranean Sea and the Red Sea.

The canal began operations in 1869. It has been a source of foreign exchange and national pride for Egypt. It brings about US$6 billion to the country every year. In 2021, 1.27 billion tonnes of cargo were shipped through the canal.…

Egypt, one of Africa’s strong economy—has seen a sharp rise in business activity which bounced back in June, marking a 4-month high record, as the North-African recovers from the coronavirus grip and showing signs of uneven recovery.

According to information from IHS Marki, Egypt non-oil sector rose sharply, while the Purchasing Managers Index (PMI) rose to 44.6 in June from 40.7 in May, remaining below the threshold of 50 that separates growth from contraction.

However, the rebound is felt evenly as still things tighten, unemployment has risen to 9.2 per cent, firms cutting wages at a fast pace in four years—hence HIS economist anticipates potential change.

READ:IMF $5.2 Billion Stand-By Arrangement for Egypt

A different view

On the other side, before the pandemic, the World Bank’s Macro Poverty Outlook noted that growth was driven by a macroeconomic stabilization program that was largely successful, generating a solid primary budget surplus, …