In an unprecedented step the Central Bank of Egypt decided to float the Egyptian pound yesterday. This step lead the US Dollar reach about 15 Egyptian pound and more. The question we need to ask after this step Is it the right time to this step?
From my simple knowledge, I can say that this decision has pros and cons; however, I need to explain some facts before ending up with conclusion. The first fact we need to know that Egypt imports more than exports. The second fact, Tourism industry suffer from long time and until the present time which is the main source of the foreign currency after the Suez canal.
The third fact, the security and instability in Egypt is so high because of the political was between the current regime and Muslims Brotherhood.
According to the facts, I have introduced, I can say that the decision to float the Egyptian pound wasn’t the right decision at that time. I would be so happy if the government made this decision while tourism industry doing well and there is stability in the society.
Having said that, I can assure that this decision has some advantage but not for the poor class. I can’t imagine the banks increase the interest rate on the Egyptian pound to be 20%. This is also will burden the poor class and will make it very hard on the small and medium local enterprises.
