Page 22 - Issue 63

Vol.1 Issue 63 January 2024Vol.1 Issue 63, May 2024 ELITE

The Egyptian Pound Devaluation:

Between supporters and opponents

Sarah Mohamed Mahmoud-Third Level-Economics Major

On March 6th 2024, the Central Bank the overnight lending rate, and the rate
of Egypt took the most anticipated of the main operation by 600 basis points
decision to devaluate the Egyptian to 27.25 percent, 28.25 percent, and

pound in terms of the US dollar. This 27.75 percent, respectively. But the thing
decision came after the Egyptian here is that the public opinion was

economy have suffered from shortages divided into two. One viewed this
of the US dollar leading to the contractionry policy as the right path

creation of a parallel exchange rate into the comprehensive economic reform
market or as we usually call it the and another opinion thought that this

black market which hinders the was not the optimal decision or at least
economic growth and price stability. not taken at the optimal time. And here
This decision came as a result to the we are going to break down the two

agreement with the international opinions for our readers and discuss
monetary fund in order to borrow them. Is the devaluation good for Egypt

about 8 billion dollars. According to and the Egyptians? Some economists
the monetary policy committee’s view this decision as a forward push for
(MPC) special press release on March the Egyptian economy and was well

6, the goal of this decision was to executed especially after providing dollar
eliminate the inflationary pressures liquidity from various means including

and to facilitate the elimination of the recent <Ra’s Al-Hekma= deal and
foreign exchange backlogs following also because it is going to put an end to

the closure of the spread between the the black market as it will increase the
official and the parallel exchange rate Egyptian’s remittances from abroad

markets. So in the light of the through the banking sector instead of the
aforementioned, the MPC decided to black market which will contribute to the
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raise the CBE’s overnight deposit rate, increase in the dollar inflows.