Tension in Cairo: The Egyptian pound today (Wednesday) fell to a new low against the dollar after the International Monetary Fund announced that the authorities are committed to a flexible exchange rate.
The currency weakened by 7.3 percent and during the afternoon traded at a value of 29.85 pounds to one dollar only.
In the last year, the currency has already experienced three decreases in its value.
Yesterday, the International Monetary Fund published the details of Egypt's rescue package, which is estimated at 3 billion dollars.
In the announcement it was emphasized that Cairo is moving towards a flexible policy in the foreign currency exchange trade and any intervention by the central bank will be guided by the need to avoid market volatility.
However, the International Monetary Fund warned that the central bank may face political and social pressure to change policy.
The President of Egypt, Abdel Fattah al-Sisi, photo: Reuters
At the same time, the "Financial Times" website reported that Egypt pledged to reduce the role of the military in its economy as part of the International Monetary Fund's bailout program.
According to the report, Egypt committed to the step in the shadow of the economic crisis, which is manifested in the lack of foreign currency, the weakening of the pound and high inflation.
The fund stated that structural reforms are critical to Cairo, and include adjustments between the public and private sectors.
On the other hand, Egyptian President Abdel Fattah al-Sisi - a retired general himself - sees the army as the main tool for restoring the local economy, which collapsed during the Arab Spring protests of 2011. This is what ousted Egyptian President Hosni Mubarak from power.
Since al-Sisi came to power at the expense of the Muslim Brotherhood, the role of the military in the Egyptian economy, which in any case was particularly significant, has deepened.
Ngamesh of the Egyptian army in Sinai,
The consequences of the Corona epidemic and the war in Ukraine on the international economy have hit the Egyptian economy, among other things due to a jump in the prices of flour and bread, which tens of millions of Egyptians consume.
Al-Sisi, for his part, does not deny the economic crisis.
However, he attributes it mainly to international circumstances and not to the structure of the economy.
In a speech delivered this week, al-Sisi addressed the difficulties in the economy: "Can we stand firm in the face of every challenge? Will Egypt give up when circumstances are difficult? Will the people of Egypt give up on it? Have we entered into wars and adventures in which we wasted Egypt's money?"
"The economic circumstances are very difficult all over the world," added the President of Egypt, "this is a crisis we are not responsible for and the war does not concern us. The situation created by the corona crisis in the last two years and the Russia-Ukraine war was not made by Egypt. But it is paying its price like all countries the world".
were we wrong
We will fix it!
If you found an error in the article, we would appreciate it if you shared it with us