Since 21 March 2022, the Egyptian currency has undergone a sharp devaluation which increasingly reduces the purchasing power of households. This devaluation is the primary cause of inflation, which is getting worse by the day. With the Egyptian population under the effect of this economic crisis, the Governor of the Egyptian Central Bank submitted his letter of resignation on Wednesday 17 August 2022. The resignation was accepted by the Head of State.
Egypt is the most populous Arab country and also the world’s largest importer of wheat, mainly from Russia and Ukraine. Thanks to this capacity, the country should be able to curb the galloping inflation, but instead it is suffering enormously from the economic crisis. Inflation is currently at 15%. Indeed, it all started after the armed conflict between Russia and Ukraine in February. Egypt therefore no longer benefits from the products exported from these countries in conflict. Inflation thus reached its peak followed by the devaluation of the Egyptian currency. This is reflected in food price increases of up to 66%. Thus, the Egyptian pound is currently at its second lowest historical level. On Wednesday 17 August, 19.1 Egyptian pounds is exchanged for one dollar. This figure has only been exceeded once, during the brutal winter devaluation in 2016.
The Governor of the Central Bank resigns in the midst of the crisis.
In the midst of the economic crisis, the governor of the Egyptian central bank Tareq Amer submitted his letter of resignation on Wednesday. According to the report by the daily Al-Ahram, Egyptian President Abdel Fattah al-Sissi accepted the resignation and then appointed Tareq Amer as presidential adviser for three years by the head of state. The name of his successor has not yet been announced. It should be recalled that Tareq Amer took charge of the Central Bank in November 2015 by presidential decision and should finish his mandate in 2023.
Given the current pace of development, Egypt risks experiencing very serious social crises if inflation is not always kept in check. Of the 103 million inhabitants, 30 million are considered poor, and many more are in precarious situations, according to the World Bank report. Egypt’s economic reserves fell from $41bn in February to $33.1bn at the end of July, according to the Central Bank. This economic downturn occurred despite $5 billion in aid from Saudi Arabia, a major ally of Abdel Fattah al-Sissi’s regime, in March.
Charbel Ahouandjinou (stag).
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