Baheya Wael - Ahram
Prime Minister Mostafa Madbouly explained the government’s plan to eliminate the dollar gap, the crackdown on the parallel market, and the expected decrease in commodities prices, in a press conference after overseeing goods release at the Alexandria Port on Thursday.
Madbouly started the conference by saying that through providing ample dollar liquidity to Egypt and the measures taken between the government and the Central Bank of Egypt on Wednesday, the country will be able to overcome economic challenges and the accumulation of arrears.
This comes with the state’s recent decision to raise interest rates by six percent to contain inflation and support citizens, and its receiving of $15 billion as a first batch from the $35 billion Ras El-Hekma deal.
“With the dollar becoming a commodity for trading, the parallel market system emerged due to the existence of dual exchange rates,” Madbouly stated.
He noted that following the state's measures, the currency will now have a unified exchange rate. The Ministry of Interior and all security agencies have been directed to take strong actions against the parallel market system and the informal transactions of Egyptians abroad, he added.
Egyptian banks along with official and legitimate channels will be the only authorized entities to handle currency exchange or transactions for Egyptians wishing to convert their foreign currency into Egyptian pounds, he explained.
Moreover, Madbouly clarified that the state’s priority is to manage currency for foodstuffs, medicines, petroleum products, raw materials, and production supplies needed for industry.
On Wednesday, the cabinet approved allocating EGP 8 billion to meet export obligations.
He said that the export support system is only for those who convert the dollar within Egypt, but with the unification of the exchange rate, the currency will be subject to the CBE.
This will enable the CBE to manage the citizens’ and clients’ needs of the dollar as long as it will be used for the trade of the aforementioned basic goods and supplies.
“By subjecting the hard currency market to order and resuming transfers of Egyptians abroad to normal, we will be able to erase the gap,” Madbouly said.
Furthermore, he promised that commodity prices would begin to stabilize and decline. However, it would take the government a few months for the Egyptian economy to return to its proper state, he added.
“We are working with traders to regulate prices to reflect the true and realistic price of goods,” he affirmed.
On Wednesday, the cabinet approved importing one million tons of sugar during 2024, which would bridge the gap in sugar production throughout the year, according to Madbouly.
The directives were to immediately start importing the first 300,000 tons so that the concepts of hoarding and disappearance of sugar in the Egyptian market would disappear.
Madbouly revealed that the investment plan for the coming fiscal year will focus on the health and education sectors, the Decent Life project, and completing open projects that reached a completion rate of 70 percent or more.
During his tour in Alexandria Port, El-Shahat Ghatouri, head of the Egyptian Customs Authority (ETA), stated that the release of goods worth more than $12 billion has started since the beginning of January until now.
The prime minister’s statement also clarified that the final value of the released strategic goods and production supplies, from 1 March to 6 March, amounted to approximately $230.90 million and $464.03 million, respectively.
In addition, the release of goods was taking place at another three ports around Egypt. Egypt plans to continue port operations and goods release until local factory lines return to full capacity.
