by Ahmed Fouda
It is basic general knowledge that any currency’s exchange rate is determined based on a number of factors; which are among the main indicators for any economy’s performance such as the Gross Domestic Production, inflation rate, and unemployment rate. Furthermore, the volume of the black economy which is linked to the import of drugs and arms do play a role in impacting the exchange rate of the local currency. That said, it is worth noting that the recent devaluation of the Egyptian pound resulted in divided views, and a debate that is ongoing in most of Egypt café’s , homes, and business ventures.
Some believe that the recent devaluations were necessary, and are to attract foreign investments and increase exports, while others believe that it will represent a major obstacle that will impede importing goods and services that are essential to the economy.
Egypt government on the other side believes that since it seeks to boost foreign investments and tourism, then devaluation is the right move. Egypt masses on the other hand are worried about how the devaluation will impact the price of goods and services ; inturn their daily life expenses.
Well, most certainly it is too early to tell, whether Egypt Central Bank move will aid the economy, push up exports, increase the flaw of tourism, and curb inflation rate or whether it will impact negatively average Egyptians and corporate profits/earnings.
As an Egyptian,and from my readings I somehow back the Egyptian pound devaluation move. The way I see it and hope, is that the move will result eventually in curbing import of unnecessary luxury goods that flooded Egypt in recent years, it will further give our tourism industry an added bonus to make it more attractive at this difficult phase in Middle East’s history. However, I cannot claim I am an expert, and it’s undoubtedly too early to tell, nevertheless, I look forward to a positive impact, one that will make us focus more on our Gross Domestic Production, and push us towards tackling the main obstacles impeding production. Production is our buzz word, this is the door to curbing unemployment, inflation, and EGP survival.