The statements of the Governor of the Central Bank of Egypt, Hassan Abdullah, during the economic conference regarding the relationship of the Egyptian pound with the US dollar, provoked varying reactions, ranging from criticism, astonishment, and denunciation.

The Governor of the Bank talked about the establishment of the "Egyptian Pound Index" to measure its price level against many other currencies and gold.

"We are not an oil-exporting country, so the culture of linking the local currency to the dollar must be changed," he said during his speech during the economic conference on Sunday.

Central Bank of Egypt Governor Hassan Abdullah says that Egypt is not an oil country until our currency is linked to the dollar only, stressing the rise of the pound against other currencies such as the Turkish lira pic.twitter.com/OZLHMvrbg7

- Al Jazeera Egypt (@AJA_Egypt) October 23, 2022

Despite the pound's decline against the dollar at a record level, Hassan Abdullah talked about the rise of the Egyptian pound against other currencies such as the euro and the pound sterling.

"Our currency has increased over the Turkish lira by 100%, but people do not see that," the bank's governor said during his speech.

These statements provoked mixed reactions in Egypt, where the media, Amr Adib, responded in a televised statement to him, saying that the bank's main task is to control inflation.

"If the dollar increases by a certain percentage, all other commodities will increase by the same percentage," he said, ruling out that the dollar's price will not reflect on inflation, considering that this is impossible in the short term considering the direct relationship between the dollar price and commodity prices in the markets.

Researcher Amr Magdy also tweeted, commenting on the statements of the governor of the Central Bank, saying, “Every problem is created by (they find) any fabrications to justify it, except for poor performance, miserable governance and corruption of management. People simply do not (do not) need all this “complicated” talk. People are looking (just looking) at the price of the dollar because it affects the prices of everything they buy (buy) in the market, including the necessities of life.”

And in response to the statement, one of the tweeters commented on Twitter, “In the name of God, God willing, he (speaks) about the rise of the pound against the Turkish lira, which (which) is basically collapsing, makes me think (reminds me) of the Minister of Communications who compares (who compares) the speed of the Internet in Egypt In Africa!"

And the economist Hani Tawfiq indicated in a post on his documented page on Facebook that the Egyptian pound has lost a lot of its competitiveness recently, pointing out that there is no need to link the local currency to the dollar, but to a basket of currencies, considering that the reasons for the loss of competitiveness of the pound are due to its high value against the euro and the pound. Sterling and the currencies of trading partners, as he put it.

A theory that is not wrong, but it is better before the change to be after a study by a group of academic economists, and not the opinion of a banker who is interested in achieving gains for the state in this case at the expense of long-term economic stability.

The priority is for the central bank to return to its original, independent role in curbing the financial and monetary excesses of the state. https://t.co/2wRMZa5lgO

— Tarik Salama (@tariksalama) October 24, 2022

Over the course of 2020 and 2021, the Central Bank of Egypt, headed by its former governor, Tarek Amer, restored the policy of stabilizing the exchange rate of the pound, and raising its value by 15% against the dollar;

To become around 15.7 pounds instead of about 18 pounds.

But he returned and partially abandoned his policy (managed flotation) last March, and devalued the pound by 15% at once, under the weight of the flight of hot money, which Egyptian Finance Minister Mohamed Maait estimated at about $22 billion later, against the backdrop of the Russian-Ukrainian war. But it wasn't enough.

Since that time, the Egyptian pound has continued its gradual decline journey until it exceeded the level of 19.62 pounds to the dollar, losing about 25% of its value compared to its level before last March 20, pending the results of negotiations with the International Monetary Fund, which is a certificate of confidence for the Egyptian economy, and opens The door to the return of apprehensive and anticipating foreign investors.