I wonder what is happening in the foreign exchange market? Why has the dollar continued its rise in recent days? Is the price at which the US currency has reached a cause for concern or are things under control? Most importantly, what are the dollar price expectations in the coming days?
In recent days, the price of the dollar in Egypt has broken all records and reached 50.90 pounds for the first time in recent transactions, meaning it has reached 51 pounds. And keep in mind, the price of the dollar is not just a number that changes. It affects all of us, from the prices of goods to projects and even travel by land.
Why does the dollar increase in this way? Does this mean that the crisis is out of control or is it a step in a larger plan?
Let me simplify the matter for you and explain to you exactly what is happening.. The Egyptian pound moves in front of the dollar according to the “flexible exchange” system that the government has adopted.. This means that the price of the dollar is no longer fixed and linked to state intervention, but is determined according to supply and demand in the market.. meaning everything. Demand increased whenever the price rose, and vice versa, whenever demand decreased and supply increased whenever the price declined and fell
Currently, there is a very large demand for the dollar in the Egyptian market, and this is due to imports, because Egypt relies heavily on the import of basic goods, and this increases the demand for the dollar. Also, dollar flows have declined because with the global crises, dollar flows from tourism or foreign investments are still not enough to cover the increasing demand. .. Finally, global monetary policy.. The dollar remained strong against all currencies after the effects of the American elections and economic policies there
The important question, which almost all of us ask: Is this height scary?
The answer depends on two angles: the first is short-term, and the rise certainly affects us as citizens, especially in the prices of goods and services, and the more the dollar increases the prices, the more expensive they become. The second is long-term, and the government is certain that this is part of a plan to reform the economy and that things will take time to adjust.
Prime Minister Mostafa Madbouly recently stated: “There is no need to worry about increases in the price of the dollar… the situation will stabilize later.”
How can this situation improve?
There is more than one step that can help reduce the pressure on the pound, the most important of which is, of course, increasing dollar flows by stimulating tourism, which is already achieving good numbers… and attracting foreign investments, and the government has begun steps to attract international investors in various sectors… and also controlling imports by reducing the import of goods. Non-essential to ease pressure on the dollar
We must remain aware that the situation in the currency market is certainly difficult and not simple, but it is important to understand that we are part of a global system that is affected and influenced by the events around us. The rise of the dollar in Egypt raises an important question: Will economic reforms be sufficient to contain the crisis in the long term?
