Manufacturers call for floating pound in exchange for providing dollar

Mohamed Alaa El-Din
2 Min Read
the Egyptian government sold international 10-year bonds worth $1.5bn with a revenue of 6%.(AFP Photo)

A number of exporters have called for setting mechanisms guaranteeing the provision of dollars, following the Central Bank of Egypt’s (CBE) decision to raise the cap on dollar deposits for exporter companies to EGP 1m monthly as insufficient.

Meanwhile, other businessmen proclaimed that they were not opposed to the idea of floating the pound’s price, on the condition that dollars are provided.

Chairman of the Federation of Egyptian Industries (FEI) Mohamed El-Sewedi said the CBE’s decision is an encouraging step to invest and increase exports, noting that the provision of dollars to exporters and manufacturers will significantly contribute to encouraging factories in Egypt.

Thereby, the CBE’s decision will create positive impression of the Egyptian market, and provide exporters with the opportunity to increase their exports, which helps increase the flow of foreign currency in the long-term.

CEO of Computek Tarek Ameen believes the decision to raise the dollar deposit cap for exporters is a positive step, but fails to address providing dollars; banks are still unable to provide the needed dollar liquidity to exporters.

He said crisis concerning the lack of dollars in Egypt increased the cost of manufacturing his factory’s products by approximately 10% as a result of the decline in the pound’s exchange rate against the dollar. Ameen called for floating the pound, or officially decreasing pound’s value against the dollar, on the condition that dollars are provided, which would serve exporters and limit the role of the informal market.

CEO of Beta Technology Egypt Hatem Hassan believes providing dollars is the real problem faced by manufacturers, given their need to import raw materials, spare parts for manufacturing equipment, and production components.

Hassan similarly called for floating the pound in exchange for providing dollars. He further noted that the CBE’s recent decision to raise dollar deposit cap is insufficient to overcome the current crisis, which mainly comprises of providing foreign exchange.

Share This Article
Leave a comment