The decision of the Central Bank of Russia to include the Egyptian pound in the list of currencies whose exchange rate is officially determined daily, raised an atmosphere of optimism in Egypt, especially in the commercial circles, given that the decision will have a “significant positive impact on the trade movement between the two countries, as well as on the exchange rate of the dollar against the Egyptian pound.” , which has been causing a crisis in Egypt for quite some time,” according to a member of the Board of Directors of the Importers Division of the Federation of Egyptian Chambers of Commerce, Ahmed Shiha.
In addition to the Egyptian pound, the decision of the Russian Central Bank included other currencies, including the UAE dirham, the Indonesian rupee and the Thai baht. The first exchange rate for the Russian ruble against the Egyptian pound after the decision was issued was 0.43 piasters.
Shiha told Al-Hurra that “the decision to adopt the Egyptian pound within the basket of currencies whose price is officially determined in Russia means that the current exchange balance between the two countries will be dealt with according to the pound and the ruble, and not in dollars as it was in the past, and this will relieve pressure on the dollar in Egypt.” In a way that makes its price in the future a true reflection of the value of the pound, and not the current exaggerated value, which makes it due to the crisis at two prices in the official market and the parallel market.
He added, “This great pressure on the dollar turned it from a currency into a commodity that is speculated at the highest price, as if it were a consumer commodity, and therefore any decision that reduces pressure on the demand for the dollar will have a great impact on the level of the economy as a whole and on the level of monetary policy in Egypt in particular.”
Reducing dollar burdens
Egypt imports a number of commodities and products from Russia, including wheat, meat, some bean and soy products, and some inputs that go into the petroleum industries. Shiha says, “The annual volume of Egypt’s imports from Russia is approximately $7.5 billion, while Egyptian exports to it represent nearly $2 billion. According to the decision of the Central Bank of Russia to remove this dollar burden and deal in it with the ruble and the pound, we will take a big step towards resolving the dollar crisis in Egypt, especially since the total Egyptian dollar imports are close to $80 billion, of which $15 billion is with China and the same amount with the countries of the European Union and with the Arab countries. 14.5 billion dollars, in addition to nearly 7 billion dollars with the United States of America, in addition to 7 billion dollars with Russia and Ukraine, which will now be dealt with in local currencies away from the dollar, as it represents a good percentage of the total Egyptian trade exchange figures as a whole, which is close to 110 billion dollars Its deficit ranges from 20 to 25 billion dollars annually.
A member of the Importers’ Division in Egypt expected that there would be “a greater demand for importing Russian goods in accordance with the decision of the Russian Central Committee, so whoever will find a crisis in providing the dollar and the product that he imports from any country that has an alternative in Russia will definitely go there because he will deal with his import messages in Egyptian pounds or even In the Russian ruble, especially since the number of countries whose exchange rates for their currencies in Russia have now been announced has reached 43 countries, including countries that have a large trade exchange with Egypt, such as China and some Arab countries, which may also be dealt with in the future in the ruble instead of the dollar.
debt crisis
The economist, Mohamed Shalaby, told Al-Hurra that “the decision of the Russian Central Bank regarding the exchange of the Egyptian pound will certainly have a good effect in Egypt, but the real crisis in Egypt is represented in the dollar obligations that must be paid in a short term, which are related to the payment of debt installments and their benefits.” .
He explained that “the pressure on the dollar will decrease by the volume of trade dealings between Egypt and Russia, but Egypt has obligations due to be paid until the middle of the high year that exceed 41 billion dollars, and this is a large number over a period of time representing 6 months, and of course there will be great pressure on the dollar throughout that period affecting the Its price and value against the Egyptian pound.
Regarding the issuance of the same decision, Shalaby said, “The economy cannot work in isolation from politics, and therefore the decision came within the framework of the Russian vision of its relationship with Egypt, despite what is announced about the positions of each party on the Russian-Ukrainian war, in addition to Russia’s desire to form economic alliances that help it at the political level, especially And that there is a growing trend in the world during the last ten years to create a new global monetary system that benefits everyone instead of the current global monetary system in which the dollar dominates everything since the end of World War II almost.
And whether it is possible to generate a Chinese decision similar to the Russian decision, Shalaby said, “China has a different situation, although it has been trying to strengthen its gold reserves recently, but it does not enter into direct confrontations of this kind because its tactics are different in dealing with crises, whether economic or political, and therefore I expect that it will not Its decision will be similar, at least in the near future, and likewise the rest of the 43 countries for which the Russian Central Bank has adopted exchange rates for its currencies, including Arab countries, each of which will make its decisions according to its political and economic interests and its relationship with the United States of America and the European Union.
