What happened at the Central Bank after the outbreak of war in Crimea, and billions of dollars left the market in a few days, and what was the worst scenario that the Central Bank prevented at that time, and what are the details of the difficult night?
The world after February 24, 2022 changed the world before it, because what happened was an economic earthquake and tsunami that shook all international markets and struck trade and supply lines in a fatal way. The result was that many countries had very violent tremors that left them on the verge of bankruptcy, such as Argentina, Tunisia and Pakistan, and in Egypt the crisis was double. Due to the rise in global prices and the rise in the value of imports on the one hand, and on the other hand, the sudden and rapid exit of billions of dollars from the Egyptian market, which feared the effects of the war.
According to data from the Central Bank, $22 billion in indirect investments left Egypt in the period following the war due to investors’ concern about the Russian-Ukrainian conflict. Mohamed Maait, the Minister of Finance, said in statements last June that more than 90% of investments Foreigners in local debt instruments exited Egypt during the three months after the outbreak of the Ukrainian crisis and the start of a tightening monetary policy in the United States.
And in order to know how large the number that came out was… indirect foreign investments had reached a record high that reached 30 billion dollars by the end of September 2021, according to Deputy Minister of Finance Ahmed Kouchouk for Financial Policies, and so that we also know that the war is not the only one that has smuggled billions of hot investments, but There is another important reason, which is that when the US Federal Reserve raises the Fed rates on the dollar, this creates pressure on local currencies in emerging markets such as Egypt, and after that, indirect foreign investments go out to the benefit of America as it is considered a safe haven in periods of global economic turmoil, in addition to its declining investment risks compared to the markets. The other is the rise in interest rates, and just so we know the Federal Reserve has raised interest rates 4 times a year, due to high inflation, this is enough to destroy emerging markets as a result of the exit of huge sums of money.
We return to our topic, what happened in the Central Bank after the start of the exit of billions of dollars… It is normal that when there is a crisis, there is room to manage it, and this is what was done in the Central Bank, which was a beehive that followed the data and numbers, and an ant in the exchange market and the dollar, and each group was Part of the crisis was being worked on, and the Central Bank was able to stop the bleeding of dollars with quick measures that regulated the withdrawal, deposit, and supply process in the market, but these days were among the most dangerous nights for the Central Bank.
2023-09-15 03:23:36
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