It would be folly to dismiss the government’s recent economic measures as all bad. There are pros and cons to measures of this sort, and wisdom lies in assessing which outweighs the other. Yes, the value of the Egyptian pound fell by around 38 per cent to the dollar when the Central Bank of Egypt (CBE) deregulated the exchange rate. From the standpoint of rational economic policy, this will help increase Egyptian exports which are the main source of the hard currency Egypt needs to rebuild its reserves. The other main sources are remittances from Egyptian workers abroad, tourism, the Suez Canal, and foreign investment.

Also, a realistic official exchange rate for the Egyptian pound and foreign currencies helps generate a healthy economic climate, which is essential for foreign investment, tourism, and economic activities involving imports. Deregulating the exchange rate, thereby eliminating the parallel currency exchange market, creates clarity for everyone involved in an economic activity. We have suffered a lot from this duality. It has been a bane to every businessperson, Egyptian or foreign, who has to conduct transactions involving foreign exchange. The float was necessary to lift foreign investment up from its lowest ranking as a source of hard currency. Undoubtedly, it will also help stimulate tourism which we have been working so hard to increase.

On the other hand, the deregulation will be worthless if we do not make all possible efforts to invest in increasing exports, attracting more foreign investments, and increasing tourist rates. The government must have a clear plan for attaining each of these goals. It cannot afford to sit back and wait for the economic measures to produce results on their own. It must formulate the policies that have the best prospects of achieving the desired results. Moreover, it must make these policies public, instead of leaving them prey to those for whom spreading rumours about useless government decisions serves their well-known nefarious purposes.

* A version of this article appears in print in the 21 March, 2024 edition of Al-Ahram Weekly