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Floating EGP: a solution for Egypt’s decreasing dollar reserves

by ChemOrbis Editorial Team -
  • 09/03/2016 (17:51)
Ahmed Shams, managing director and head of products at EFG Hermes, told to a local Egyptian newspaper that the Egyptian economy is suffering from an increasing budget deficit and a lack of direct foreign investment. According to Shams, recent developments in the Gulf area regarding oil prices and geopolitical risks are affecting current and future aid from the Gulf.

Shams noted that economic protocols suggest that the solution to decreasing dollar reserves is to float the pound. However, this solution is difficult to implement in Egypt due to the political and social dimensions associated with this decision. Therefore, it is necessary to work to increase dollar resources, either through available resources and price adjustments, which will be difficult, or by setting restrictions to rationalize imports.
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