• El-Sisi blocked the currency float while politically exposed in 2023, then implemented it in 2024 after securing unprecedented external financing. 
• Domestic institutions offered little resistance, while the IMF repeatedly accommodated delays to Egypt’s reform programme.
• El-Sisi has bought stabilisation without structural change, leaving Egypt running the same model that led to the crisis he claims to have solved.

Why is El-Sisi HOT?

Answer: El-Sisi turned a forced devaluation into a demonstration of control, delivering reform on his own terms without risking his grip on power.

On March 6th 2024, Abdel Fattah el-Sisi’s Central Bank of Egypt (CBE) abandoned its fixed peg of 30.85 EGP to 1 USD, allowing it to fall to around 50/USD in a single day. The decision followed a balance-of-payments crisis caused by a decade of debt-financed mega-projects, rising public debt and persistent foreign-currency shortages.

El-Sisi’s administration had a record of announcing exchange-rate flexibility before delaying or reserving it. Most notably, a 3 billion USD 2022 IMF package fell apart after Egypt failed to meet exchange rate commitments, with 700 million USD delayed. El-Sisi publicly opposed an immediate float in June 2023, arguing that a sharp devaluation would threaten national security. He later presented this as a strategic decision to delay the float until sufficient external financing had been secured. 

El-Sisi delayed the float until the 35 billion USD Ras al-Hikma deal with the UAE had been secured, helping unlock additional financing from the IMF, EU and World Bank worth a combined 57 billion USD.

Exchange rate flexibility is a formal recurring benchmark under the IMF’s Extended Fund Facility (EFF), assessed through indicators including bank backlogs, the official-versus-parallel exchange-rate spread, and interbank turnover. Egypt met these requirements.

What is changing El-Sisi’s heat level?

Answer: The one veto player that could stop el-Sisi chose not to, while the public that resents his reform has no way to act on it.

El-Sisi has neutralised or co-opted every meaningful domestic veto player before implementing reforms. Emergency-court powers introduced in 2017, rewritten electoral laws in 2020, and a 2019 constitutional amendment extending his tenure to 2030 have left institutions unable to hold him accountable. 

The military was one genuine veto player, yet el-Sisi never fought it. He has been selective about where costs have fallen; the devaluation was allowed to hit the broader population while everything affecting the military stalled. Disinvestment was “slower than envisaged”, State-owned enterprise reporting benchmark unmet, and tax exemptions were removed only in February 2026 after the IMF downgraded it to a “prior action” measure before funds were released. El-Sisi has consolidated power by rewarding his military allies rather than confronting them. 

The IMF was the only external actor capable of materially constraining el-Sisi’s financing strategy. Egypt was so behind on the 5th review that the IMF bundled it with the 6th on the 25th of February 2026, releasing 2 billion USD, and extending the deadline to December 15th 2026. Non-compliance carried no financial penalty; El-Sisi complied where reforms posed limited political costs while delaying measures that threatened his coalition, yet continued to receive international financial support.

The float has damaged el-Sisi’s public standing, but anger has nowhere to go. Devaluation transferred the costs of adjustment onto households in a country where 30% of its population already lives in poverty, and non-subsidised food staples by nearly 100% in one year. The Arab Barometer confirms economic dissatisfaction: 85% say the government is doing badly on prices, and 60% name the economy as the most urgent problem, up from 47% in 2022. While direct presidential approval data is unavailable, survey evidence suggests widespread dissatisfaction with the economic consequences of the reforms introduced in 2023. 

Yet this dissatisfaction has not translated into an immediate political threat. His 2013 protest law has removed mobilisation, with penalties that can include prison sentences. Yet, discontent is not directed against his rule: 71% say the political system matters less if economic problems are solved, and 76% are uninterested in politics. Survey evidence suggests many Egyptians prioritise economic performance over political participation.

What is driving El-Sisi?

Answer: El-Sisi is driven by survival rather than structural reform; it’s why he delivered the currency reform and stalled on everything else.

El-Sisi survived his reform by delaying it until his re-election. His 2023 refusal and 2024 floating are not two separate events but appear consistent with a strategy resisting while electorally exposed, and complying once compensated and entrenched. Postponing painful steps until his electoral victory in December 2023 let him impose necessary hardship on a public unable to punish him until 2030. 

He also secured substantially greater external support. The previous 3 billion USD programme had failed because Egypt would not float its currency freely. By stalling until after the Ras al-Hikma deal, el-Sisi almost tripled the programme’s value to 8 billion USD and shifted its emphasis towards inflation targeting. He ultimately accepted IMF conditions, only after securing enough external financing to shape how and when they were implemented.

El-Sisi personally fronted the announcement in 2024, promising improved conditions, citing 45-50 billion USD deals he orchestrated. His refusal in 2023 and delivery in 2024 were both presented as strength, converting a forced concession out of crisis into a display of agency at no cost to his standing as crisis manager.

Stabilisation worked. Imports normalised, banks were recapitalised, energy arrears paid down; remittances recovered to 9.9% of GDP, and the currency account deficit narrowed to 4.2%. A weaker Egyptian pound also improved price competitiveness. This achieved el-Sisi’s short-term objective of restoring macroeconomic stability. 

However, it treated a symptom. The IMF programme paired the float with wider structural reforms intended to expand the private sector’s role towards private sector rebalancing. The IMF finds disinvestment “slower than envisaged” with no material divestment in 24 months, and consolidation has leaned on a one-off asset sale to Qatar worth 3.5 billion USD, closing the fiscal gap without moving activity out of state hands. 

What el-Sisi produced was a temporary equilibrium: post-2024 gains reliant on financial injections and recovered remittance channels, inflows negotiated rather than built. El-Sisi’s Egypt remains structurally vulnerable to external shocks: external debt of 163 billion USD concentrated in short-term maturities, domestic savings sit at 11-12%, and reserves cover only six months of imports. El-Sisi’s economy still runs on the same model, and while he has achieved his stabilisation objective, it did not bring the structural transformation the float was meant to enable.

What does this mean for you?

Answer: El-Sisi has bought time rather than a solution, and the price is a governing model that depends on external subsidies. 

In the short term, the constraint is fiscal. Interest payments make up 83% of tax revenue, while gross financing needs will sit near 40% of GDP for the next three years, and about 60% of domestic debt is short-term. El-Sisi’s stabilisation has brought him quiet, but not fiscal space.

In the long term, El-Sisi’s tenure until 2030 guarantees he will be in office the next time the model requires a rescue. The underlying pattern, i.e., high rates to attract short-term capital, external financing, and periodic currency correction, remains intact, and the price of stabilisation has risen dramatically: 3 billion USD in 2022 versus 57 billion USD in 2024. El-Sisi has therefore not escaped the crisis so much as scheduled the next one, and the cost he avoided in 2024 will become payable at whatever price the next rescue commands.