As deficit soars, Egypt expands money supply, fuelling inflation

Egypt risks fuelling its record inflation and putting more pressure on the Egyptian pound if it does not slow an expansion of the money supply which bankers and analysts say has been used to plug widening budget deficits.

Central bank figures show "M1" money supply, which includes domestic currency in circulation and demand deposits in Egyptian pounds, jumped by 31.9% in the year to end-May 2023, after growing 23.1% in the fiscal year to end-June 2022 and 15.7% in FY2020/21.