Source: Brookings Institute
Author(s): Adel Abdel Ghafar
The Egyptian government appears to be on the verge of further devaluing the pound. President Abdel Fattah el-Sissi met with the governor of the country’s central bank Amer last week to give political cover to the move. Beltone Financial, an Egyptian investment bank, advised that the move is imminent. The devaluation and partial flotation would be part of a wider deal with the IMF to implement economic reforms in return for a much-needed $12 billion loan to jump-start the economy.
For Egyptians who are likely to see their savings devalued by up to 30 percent, there is a sense of impending doom. The people know the move is happening, but not exactly when or what to expect. While the devaluation makes good economic sense in the long term, there will be immediate negative consequences for the poor and the struggling middle class. Meanwhile, the opaqueness of the decision making process reflects badly on the economy and continues the Egyptian government’s rich tradition of keeping its population in the dark on major economic policy shifts….
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