Egyptian Currency Sees Drop in Dollar Price After Joining BRICS

Egyptian media have reported that the price of the dollar has fallen over the past few hours on the Egyptian parallel market to around 39 pounds after hitting 43 and 44 pounds after joining the BRICS group.

Positive Implications for Egypt’s Economy

Egyptian banks announced the price on their official websites, which has remained stable since March 10 last year without any increase for more than 5 months, except for the Central Bank.

Minister Plenipotentiary Yahya al-Watik Billah, head of the Office of Commercial Representation, said that Egypt’s accession to the BRICS has many positive implications for the economy and that the BRICS group tends to rely mainly on local currencies.

He added that Egypt’s accession to the BRICS will help reduce dependence on the dollar.

Al-Watik Billah explained in televised statements that if the central bank succeeds in developing an appropriate plan for working in local currencies, it could be possible to reduce dependence on the dollar by 40% if the trade exchange takes place in local currencies with India and China.

The Central Bank of Egypt intends to launch a pound index before the end of 2023, which will determine the real price of the local currency against other currencies, in order to change the culture of pegging the local exchange rate to the US dollar.

BRICS Membership Impact on Dollar Value

Abu Bakr El-Deeb, an economics researcher and adviser at the Arab Research Center, confirmed that Egypt’s entry into the BRICS group is one of the main reasons for the fall in the value of the dollar against the pound in the parallel market, noting that the accession of Egypt to the group instilled a certain optimism at the investment level among investors and businessmen.

Abu Bakr Al-Deeb said in a statement to RT that “BRICS” will help increase trade exchanges with a number of the world’s largest countries, such as Russia, China and the rest of the Gkowa countries, noting that the use of national currencies is far from being dominated by the dollar.

He noted that the entry of Egypt into the BRICS group and trading in local currency will reduce the dominance of the dollar over the Egyptian pound, in addition to the fact that large investments are expected from the BRICS countries in Egypt.

He explained that he was simply thinking about an alternative currency to the dollar within such a huge economic grouping as the BRICS, especially since after the accession of new countries, it could reach 80% of the size of the world economy.

He noted that Egypt’s entry into the BRICS had two rapid effects: firstly, the rise in the value of the pound against the dollar in the parallel market, and secondly, the Egyptian Stock Exchange, which achieved historic growth in two days.

He noted that Egypt’s entry into the BRICS has once again and strongly restored investor confidence in the Egyptian economy, noting that Egypt is a large market of 105 million citizens and a gateway to the African market of 1.5 billion consumers.

He noted that in the coming period, the Egyptian economy will experience great momentum and will attract a number of foreign investments, especially in the transport, energy and agricultural sectors.

Source: RT