The USD shifted to a commodity rather than a currency: PM

CAIRO – 7 March 2024: Prime Minister Mostafa Madbouly stated that the dollar shifted to a commodity traded in the parallel market rather than a currency, in a recent press conference held at the Alexandria Port. This is why the Egyptian government and the Central Bank of Egypt (CBE) had to interfere to unify the exchange rate and stabilize the economy.

The Prime Minister revealed that a significant quantity of goods and merchandise will be released from the ports on the same day. 

Madbouly highlighted the government’s commitment to securing foreign currency, stated that priority would be given to essential sectors such as food, medicine, fodder, petroleum products, raw materials, and production requirements for the industry. 

Madbouly stressed that the unification of the exchange rate was a crucial step to confront the economic challenges faced by Egypt. He expressed confidence in the measures taken by the government and the Central Bank to achieve this goal and stated that it would help address the parallel currency market and informal markets for Egyptians’ remittances from abroad.

To combat the parallel currency market effectively, Prime Minister Madbouly directed the Ministry of Interior to implement strict measures. These measures aim to curb illegal trading activities and ensure the integrity of the foreign currency market.

Furthermore, the Prime Minister reassured the public that the CBE would have the capacity to provide the necessary dollar needs in the future. This assurance aimed to alleviate concerns and restore confidence in the Egyptian economy.

The government’s efforts to reduce export burdens were also mentioned during the press conference. Prime Minister Madbouly announced that EGP 8 billion had been allocated to alleviate the financial constraints faced by exporters, providing them with the necessary support. 

Madbouly also announced the approval of the import of 1 million tons of sugar, with an immediate import order of 300 thousand tons.

On Wednesday, Egypt devalued its currency on Wednesday, resulting in the Egyptian pound’s value decreasing to over 50 per dollar by midday, in contrast to the maintained rate of approximately 30.9 over the past year. The CBE also raised interest rates by 600 basis points reaching 27.25 percent.