A report in the "Middle East Eye" website said that the Egyptian people "are now suffering pain" due to the huge rise in prices in everything with the devaluation of the pound, and quoted experts as confirming that "ordinary Egyptians have a lot of pain in the future." .

This comes at a time when HSBC expects the dollar price to reach the level of 30-35 pounds in the short term.

The report stated that Capital Economics expects inflation in Egypt to peak at 27% by the end of the first quarter, while it had reached 18.7% last November.

The author of the report indicated that with the devaluation of the pound, imports become more expensive, which causes an austerity crisis at the level of the whole country, so that the solution - in the opinion of experts - remains to produce more and consume less, especially from abroad.

According to the report, the Egyptian currency suffers from successive declines, while the country is trying to get rid of its addiction to the dollar, as the pound fell against the US currency by 40% in 2022, which is one of the worst currency performances in emerging markets last year, and the value of the Egyptian pound in 2023 began to decline. decrease by more than 7%.

According to the report, Egypt is finding it difficult to secure hard currency, at a time when it has $45 billion in debt payments due this year.


The report also stated that with the Russian-Ukrainian war, foreign investors withdrew $22 billion from Egypt, while the high interest rate in the West made Egypt a less attractive destination for foreign investors.

According to the report, experts believe that positive results will appear when Egypt implements austerity policy, obtains additional assistance from its neighbors, lowers food prices and revives tourism, while the danger remains that Egypt's debts will get out of control.

In the first week of 2023, Egypt carried out an additional move in the price of the pound downward, bringing the exchange rate by the end of last Thursday’s dealings to 27.2 pounds, at a time when the price of the dollar in the parallel market reached 33 pounds.

It does not seem that the Central Bank of Egypt will stop moving the exchange rate, until it becomes equal to the parallel market rate, between 29 and 33 pounds per dollar.

The Central Bank of Egypt said a few days ago that net foreign currency reserves rose to $34 billion last December, compared to $33.3 billion last November.


Expectations

On the other hand, a report issued by HSBC Bank said that changes in exchange rates in the Egyptian market may end when the dollar reaches the level of 30-35 pounds in the short term.


The bank stated in a report issued - at dawn today, Monday - that this decline in the exchange rate of the pound against the dollar may be accompanied by additional increases in interest rates, especially with the return on savings certificates reaching 25%.

Last week, Banque Misr and the National Bank of Egypt issued savings certificates for a year with a return of 25%, which is the highest level recorded in the history of savings certificates.

Since March 2022, the pound has witnessed 3 movements against the dollar, from an average of 15.7 pounds per dollar, to 27.2 pounds last week.

The report of the British Bank said that the decline in the exchange rate of the Egyptian pound against the dollar will put pressure on the import bill, but it may enhance remittances of Egyptian workers abroad to take advantage of the exchange rates.

He added, "We expect, due to these changes in exchange rates, that the inflation rate in the country will increase to an average of 25 percent, and that it will not fall below 20 percent until next year."