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The Need for a Supply of Dollars to Solve Inflation in Egypt
Tarek Metwally, former vice president of Blom Bank, said that the coming period requires the supply of dollars to solve the inflation problem and calm the markets in Egypt.
The Real Problem
Metwally added, in an interview with Agency, that the real problem the Egyptian economy suffers from is the exchange rate, not the interest rate.
He highlighted the need for the banking sector to return to being the leader in determining the exchange rate, and for the dollar to be available in banks for those who request it, explaining that this step represents 70% of the inflation problem in Egypt.
Random Pricing of Dollar in the Production Costs of Goods
He said there is a random price of the dollar in the production costs of goods, some of which cost the dollar at £30, 40 or £50.
Metwally continued: “A commodity like gold is priced in excess of its global value, by more than £1,000 per gram. Markets are currently in a state of turbulence that is not healthy until we expect the next situation.”
It is evident that there is a crucial need for a supply of dollars in Egypt to solve the inflation problem and calm the turbulent markets. The banking sector needs to take the lead in determining the exchange rate, and the dollar must be readily available in banks for the people. Addressing these issues will significantly impact the economy positively, and bring about stability in the Egyptian markets.
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