A Record Drop for the Egyptian Pound Against the Dollar | DW Arab News | Latest news and perspectives from around the world | DW
Refinitiv data showed a decline Egyptian pound Up to 30 pounds against the dollar in volatile trade this morning (Wednesday, 11th January 2023). Egypt pledged a flexible exchange rate, a bigger role for the private sector and a package of currency and tax reforms as it agreed a $3 billion financial support package with the International Monetary Fund, a report released by the fund revealed on Tuesday.
The country was already under financial pressure before the war in Ukraine decimated tourism revenues, increased the cost of importing primary goods and prompted foreign investors to drain more than $20 billion from the economy.
Data released on Tuesday by the Central Agency for Public Mobilization and Statistics showed that annual consumer price inflation in Egyptian cities rose to 21.3 percent in December, the highest since late 2017, beating analysts’ expectations has.
The surge in urban consumer price inflation comes after a local currency devaluation in October and amid ongoing import restrictions. That was the median forecast in a Reuters poll of 15 economists inflation20.50 percent. Five economists also expected core inflation, due to be announced later Tuesday, to rise to an average of 23.6 percent after hitting 21.5 percent in November.
The central bank dropped the Egyptian pound by about 14.5 percent on October 27 and slowly and gradually dropped its value in November and December. “Food and beverage prices rose 4.6 percent month-on-month (up from 4.5 percent in November), mainly driven by prices for bread, grains, dairy, vegetables and meat,” said Allen Sandeep of Naeem Securities Brokerage.
Sandeep added that this was partly due to the pound’s 25 per cent devaluation in late October, but forecast further inflation. “Monthly inflation is up about 7 percent over three months… With the ongoing fresh devaluation, which we expect to come in at about 15 percent, we can expect annual CPI to hit 25 percent by February,” he said.
The price hike will increase pressure on the central bank’s Monetary Policy Committee to hike interest rates at its next meeting, scheduled for February 2nd.
HH/AF (Reuters/AFP)
-
Food subsidies in Egypt… unforgettable stations and crises
1910 – the end of the First World War
In the second decade of the last century, Egypt took long steps to keep bread prices affordable. Shortly after the end of World War I, it imported wheat and wheat flour from Australia and sold it at a loss in government stores to drive down local prices.
-
Food subsidies in Egypt… unforgettable stations and crises
1940s – The effects of World War II reach Egyptian society
Egypt introduced a card distribution system for all citizens to deal with wartime shortages of a number of basic necessities, which severely affected living standards, through a million Egyptian pounds scheme. Sometimes groceries and other staples such as sugar, cooking oil, tea and kerosene were subsidized on a monthly basis. After the end of World War II and the stabilization of trade and economic conditions around the world, government subsidies were discontinued.
-
Food subsidies in Egypt… unforgettable stations and crises
The 1950s and 1960s – the umbrella of sponsorship expands and expands
Egypt has expanded its food subsidy system, but the cost of subsidizing wheat has been negligible for many years. The support covered all sectors while the government indirectly supported government agencies to make up their deficits such as public transport, electricity, water, railways, fuel and others. The use of ration cards began to provide basic necessities that declined after 1967 as a result of the war, and the commoner could receive monthly rations that included flour, sugar, soap, rice, and cooking oil.
-
Food subsidies in Egypt… unforgettable stations and crises
The 1970s – The world wheat supply crisis reaches Egypt
Some rationed goods such as legumes and some frozen products such as chicken and meat were added while subsidies for transport, electricity and fuel were retained, bringing the value of direct subsidies to around £20m in 1970. However, a sharp increase in wheat prices on the world market in the early 1970s led to an increase in the cost of food subsidies, which accounted for a large part of government spending.
-
Food subsidies in Egypt… unforgettable stations and crises
1977 and the bread riot
Late President Anwar Sadat announced an increase in the prices of some foodstuffs and commodities, such as bread, tea, rice, sugar, meat, textiles and other necessary commodities, by up to twofold, prompting massive public anger and events known at the time the bread riot, and this prompted the government to impose a curfew and the army took to the streets to control acts of vandalism targeting government buildings and commercial establishments. Peace only returned when the government withdrew its decisions.
-
Food subsidies in Egypt… unforgettable stations and crises
Eighties and nineties – small increases in the price of bread
The price of subsidized bread remained at half a penny until the mid-1980s when it was decided to raise the price to a penny. In 1984 the government increased the price of subsidized bread to 2 piasters and this lasted until 1988 when it was decided to increase the price to 5 piasters. Egypt slowly reduced its subsidy programs in the 1980s and 1990s. While the price of bread was not directly increased, small changes were introduced in relation to the size and quality of the loaves, which helped reduce the cost of the programs.
-
Food subsidies in Egypt… unforgettable stations and crises
2011 – “Bread – Freedom – Social Justice”
“Aish” (bread) was the first word of the main slogan of the 2011 uprising that toppled former Egyptian President Hosni Mubarak. The reference to “life – bread” was a symbolic sign of the lack of sufficient jobs and the low income of many sections of the population, which to a large extent resorted to two or even three jobs to cover the basic needs of education, health, nutrition and Reside. In Tahrir Square, graffiti artists painted “live” on the walls.
-
Food subsidies in Egypt… unforgettable stations and crises
2013 to present
Since 2013, the government has made several decisions related to the lifting of subsidies for many services and goods, the most notable of which was a gradual increase in the price of electricity, natural gas and fuel. Recently, the matter has been expanded to include lifting of Subsidies to talk a loaf of bread, with the aim of providing the necessary funding for the food system that will be allocated to schools worth 8 billion Egyptian pounds. The government is currently providing around 60 million people with a subsidized loaf of bread, at a rate of 5 loaves per person per day, at a cost of 5 piasters per loaf.
#Record #Drop #Egyptian #Pound #Dollar #Arab #News #Latest #news #perspectives #world
