At a vegetable market in the Kay Romanian district, mother-of-two Fatma Ibrahim is alarmed by price increases since the start of the Russian-Ukrainian war and worries about how to support her family during the coming Ramadan subsistence.

“I’m barely coping,” said the unemployed divorcee. “Cooking oil has increased a lot and even the simplest dishes need it. I don’t buy cauliflower or eggplant anymore because frying them consumes too much oil. The price of flour has also suddenly skyrocketed.” Daily Ramadan fasts broken by nightly feasts , many people bought more food. “I don’t know how we’re going to deal with Ramadan.”

Rising prices on the Egyptian market are a microcosm of the far-reaching effects of the war on the North African nation’s economy. Soaring oil and commodity prices have hit one of the world’s top wheat importers hard, as has the loss of tourists from Russia and Ukraine. Billions of dollars have flowed out of Egyptian debt held by foreigners in recent months.Last week, Cairo asked the International Monetary Fund help, for the third time in six years. Egypt is already one of the largest borrowers of the fund after Argentina.

Fitch Ratings said this month that the Ukrainian war “has exacerbated Egypt’s external vulnerabilities”. “Egypt will suffer from reduced tourism inflows, higher food prices and greater financing challenges as a result of Russia’s invasion of Ukraine,” the rating agency said, adding that “the crisis has exacerbated Egypt’s risk of non-resident investment outflows from the national currency. Vulnerability. Bond market.”

Rising global interest rates, coupled with concerns about the Egyptian economy in the absence of an IMF program, and perceptions that the currency is overvalued have spurred outflows, Fitch said. To shore up its stressed fiscal position and restore confidence in its economy, which relies heavily on “hot money” or attracting foreigners to short-term local debt markets, Egypt last week devalued the pound before announcing it was seeking IMF support.

“Egypt has a structural reliance on hot money, so it is vulnerable to investor sentiment,” said Farouk Soussa, an economist at Goldman Sachs International. Since the end of January, due to the war, Egypt withdrew about $15 billion.

Russia’s invasion of Ukraine A substantial increase Prices of wheat, edible oil and petroleum. Egypt is the world’s largest importer of wheat, and its subsidized bread program benefits about 70 million people — or two-thirds of the population. Successive governments have seen cheap bread as the key to stability in a country where more than half of the population is considered poor.

On top of that, the loss of tourists from Russia and Ukraine, the two largest tourism markets, has dealt a further blow to an industry that is just beginning to recover from the pandemic.

Hotel occupancy at Red Sea resorts has fallen to 5 percent, according to Nader Henein, vice president of major travel company Seti First Travel. “We expect Egypt to double the number of tourists from last year to 7 million, with Russians and Ukrainians half that number,” he said. “Everything has stopped. It’s a big disappointment. Migrants from Germany have grown, but they can never replace the Russians.”

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Turning to the IMF should provide some respite, Sousa said, noting that since Egypt has exceeded its quota to borrow from the lender, the fund may ask it to obtain co-financing from other sources. ADQ, Abu Dhabi’s sovereign wealth fund, is discussing a $2 billion investment in some listed companies, according to Bloomberg. Other Gulf states are said to be considering supporting Egypt.

Sousa said he expected the IMF to focus on maintaining a flexible foreign exchange regime and “the role of the military and the state in the economy and leveling the playing field for competition”.

Some say the military has expanded its footprint in the economy since President and former military chief Abdel Fattah al-Sisi took office in 2014, spooking fears of a relationship with The country’s most influential institutions compete with the private sector.

As Ramadan approaches, the police and military of major food-producing countries have deployed trucks in many impoverished areas to sell basic food items such as meat, rice, pasta and oil at low prices. “We are fully prepared [for Ramadan] And all the goods can be found in the market,” Sisi said at a televised event last week. “The army has provided two million food boxes and is ready to provide three or four million without limit. He turned to the Secretary of Defense and instructed to “sell it for half the price.” The reply came back: “Yes, sir.” “

Back in Manial, Shaban Hussain, a coffee shop owner with four children, said food prices were already high before the war and rose further after the conflict. “I can’t pay the rent for the coffee shop because there are so few customers,” he said. “How can they get drinks when everything is so expensive?”