Analysis - Egypt's strategic position in the Middle East, its political importance to the US - and proximity to rich neighbours - has allowed it to secure much-needed financial resources.
Egypt's strategic position in the Middle East, its political importance to the US - and proximity to rich neighbours - has allowed it to secure much-needed financial resources.
But in the longer term, a country is better off with policymakers who are skilful rather than merely lucky. And although the Egyptian government has committed to some important reforms in exchange for all this dollar liquidity, it is a stretch to imagine that the required momentum behind the reform programme will be sustained.
Without the huge inflow of dollars from the UAE - principally to invest in Ras El-Hekma, a vast development area on Egypt's north coast - the pound's exchange rate would have been significantly weaker than it is now, resulting in even higher inflation rates and associated pain for low-income households. Only a few weeks ago, before the UAE announcement, the pound was trading close to 70 to the dollar on the parallel market.
One big obstacle is the central bank's long-standing habit of allowing a devaluation of the currency when US dollars become intolerably scarce - as now - but then basically re-pegging the exchange rate at a weaker level. Egypt has a classic case of what economists sometimes call a 'fear of floating'.
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