The Central Bank of Egypt is developing an index of the Egyptian pound to cancel the pegging of the national currency to the dollar. Hassan Abdalla, chairman of the Egyptian central bank, said this on Sunday.
Speaking at the economic forum in Cairo, Abdalla stressed that the currencies of oil-producing countries, which Egypt does not belong to, are most often pegged to the dollar. "Therefore, regardless of the dollar's exchange rate, we started working on an index of the Egyptian pound," Asharq TV quoted him as saying. He also noted that the US is not Egypt's main partner.
According to the central bank chief, the Egyptian pound indicator could be based on a basket of several currencies as well as gold and other metals. "Part of our success will depend on whether we manage to get rid of the preconception that we need to peg [the Egyptian pound] to the dollar. We want to be visible against any currency," Abdalla added.
The Egyptian pound has lost more than 27% against the dollar since March this year, when the regulator raised interest rates by 100 basis points. However, Abdalla noted that the national currency has strengthened against the euro, the British pound and the Turkish lira, but "people don't notice it."
In March, the Egyptian government requested assistance from the International Monetary Fund (IMF) to implement a comprehensive economic program amid the crisis around Ukraine. Egypt received a loan of about $12 billion from the IMF in 2016-2019 for economic reforms. The Arab republic is currently implementing the second phase of structural reforms in the public sectors of the economy. Last year, two more loans worth a total of $8 billion were provided to Egypt through various financing mechanisms to eliminate the negative effects of the pandemic.
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Based on materials from TASS