After the Kuwaiti dinar reached 110 pounds… Why are Arab currencies growing so strongly in Egypt?

Egyptian economic analyst Hanan Ramses revealed the secret of the growth of foreign and Arab currencies against the Egyptian pound after Egypt reversed the pound against the dollar more than 6 times.

An Egyptian expert indicated in statements to RT that the Egyptian government left the pound in Wednesday’s deals to forces of supply and demand as the price of the pound fluctuated against the dollar and the rest of the Arab currencies, with the price of the Saudi rial hitting nearly 8 pounds.

She explained that as the price of the Kuwaiti dinar changed against the pound, the dinar reached approximately 110 Egyptian pounds, which is the highest historical peak that the prices of Arab currencies have reached against the pound.
The dollar also reached 32 Egyptian pounds.

She pointed out that Egypt is suffering from a foreign exchange crisis, especially the dollar, due to rising world commodity prices, as well as many geopolitical issues that negatively affect the global economy, the most important of which is the growth of the global economy. inflation rates to levels not seen in the past 40 years.

And Ramses continued: “Inflation in Egypt has risen to 22%, the highest it has not reached since 2017. The state even began to stop many projects or not start projects with a dollar component.”

An Egyptian economic analyst noted that due to the correlation of Arab currencies with the dollar due to its association with a barrel of oil denominated in dollars, there have been movements for all Arab currencies in which the transaction is not related to supply and demand, but due to the movement of the pound against the dollar.

She said that the movement of the rial in the past was associated with religious events such as Umrah and Hajj, but now this movement is associated with the price of the dollar and the devaluation of the pound against the dollar in accordance with the directives of the International Monetary Fund, which continues to consider that the pound is still highly valued against a basket of currencies.

Ramses stressed that the movement of the pound from March last year to today has reduced its value by 77%, and this decline has affected the purchasing power of the pound and prices have risen at a high rate, which increased the monthly inflation rate until they led to 36% increase in food basket inflation.

Analyst Hanan Ramses explained that Egypt has many options to control the foreign exchange market, including the sale of many state-owned assets, attracting more Arab and foreign investment, expanding crop exports, and converting Arab countries’ deposits into long-term deposits without entering into asset purchases to ensure stability. foreigner’s cash reserve.

Source: RT

Cairo – Nasser Hatem