A US dollar crisis has swept Egypt since late December. As the market for foreign currency has dried up, the value of the Egyptian pound dropped consecutively against the dollar to reach LE6.59.
While the banking elite assures that people should not be anxious about the pound’s devaluation, saying the Central Bank of Egypt (CBE) will soon curb the hike in the value of the dollar, various views exist on the street on the drop in the pound and its impact on daily economic life.
On Thursday, Hisham Ramez, a former CBE deputy governor, was named the new head of the CBE after President Mohamed Morsi accepted the resignation of CBE governor Farouq El-Oqda, who headed the bank since 2003.
It is expected that Ramez will maintain El-Oqda's longstanding monetary policies. El-Oqda has attempted to shore up the Egyptian pound against foreign currencies by tightening restrictions on currency speculation.
Ahram Online met with average citizens and asked them how they feel about the devaluation of the pound and the impact it is having on their lives.
Ali El-Sayed, 24, cigarette stand seller
Last week, when I went to buy my monthly goods from the wholesaler, I found the prices of imported commodities rose by LE5 ($0.76). This is due to the high rate of dollars these days.
I see the foreign currencies’ speculators are happy now; it’s their rush time to take benefits from under-the-table dollar trade.
Economic deterioration and declining foreign reserves are hampering the government from taking forward steps to stop the pound’s devaluation. I think it will take time.
Hossam Saadawy, 28, journalist
We are not self-sufficient; most of our daily needs are imported, so I think they will be hit.
The increase in imports' prices will badly impact external and domestic debts and then our budget deficit.
As a 28-year-old man I am looking for a proper place to live, food and clothing, these are simple demands but maybe I will face problems to meet them if the dollar continues to rise against the pound.
I want the government to have the capability of controlling the crisis but, unfortunately, it is between the hammer of the dollar and the anvil of the International Monetary Fund’s conditions to approve the $4.8 billion loan which will help Egypt.
Abdel-A’aty Hassan, waiter at a cafe
We have to realise that the pound will not be able to compete with the dollar, which is the worldwide strongest currency since the Second World War.
We witnessed a similar crisis in 2003 and the pound recorded 7.00 against the dollar, but we overcame it and the rate went back to normal.
Mohamed Hassona, newspaper seller
I’ve heard that the current government proposed to make the Suez Canal’s revenues in the Egyptian pound to replace US dollar and I do not know if this is true or not but given the current rate of the pound against the dollar I think Egypt will face terrible disasters if that happens.
We do not have foreign currency sources but tourism and the Suez Canal, and our domestic economy is not helping to raise the growth rate of the country, while tourism is failing. A dollar crisis becomes assured.
The dollar black market has risen again, like in the 1970s. Undercover traders are seeing their best days.
Ashraf Mahmoud, beans and falafel seller
Dollar’s hikes are not yet affecting the market. President Mohamed Morsi’s statement in December about new taxes was really influential on the market and traders.
Two days after Morsi’s statement, I went to buy coal and a kilogramme had risen by LE6 ($0.9) despite that the new tax increases were delayed until further notice.
Beans prices are so far stable and did not see new jumps, but the government should target traders who exploit the situation to raise prices.
Adel Sayed, taxi driver
I am 64-years-old and I know a lot about this country (Egypt). The government should reduce its imports, especially luxuries such as needless foodstuffs, for example, biscuits and spread cheese. I think the dollar’s value then will slip back.
Probably we will remain importing urgent commodities such as medicines and machines regardless of its high cost.
Endorsing domestic industries and products will push up the pound. Also, the youth movement in Cairo’s Tahrir Square, and who sit-in at the presidential palace, must go back to work and develop new projects to improve our economy.