The Egyptian economy will not be negatively affected by the current dollar crisis, Governor of Central Bank of Egypt (CBE) Tarek Amer said Saturday.
Amer said during the 2016 Business for Africa, Egypt, and the World forum in Sharm El-Sheikh that the economy will recover quickly, supported by the “strong” economic measures taken in the last period to address the deficits in the balance of payments and the general budget.
CBE introduced new regulations on imports and dealings through dollars. It further increased the cap on dollar deposits with the aim of alleviating the catapulting demand on dollars in the informal market, which saw the value of the dollar breaking the EGP 9 barrier recently.
Amer projected that the recent measures and regulations would have positive impact on the Egyptian economy in the short-term.
He moreover highlight Egypt’s “significant capabilities”; however noting that the market suffered under the lack of regulations in the past period. “We are working to stabilise prices to achieve social stability,” according to Amer. “Of course there will be complaints and voices objecting to these measures. However we will not pay heed to these unpatriotic voices, and will defend our decisions. Rest assured; Egypt’s economy is strong and all economic challenges are being addressed strongly and quickly.”
The economic administration is working on introducing regulations and procedures allowing citizens to benefit from the availability of goods at affordable prices.
As for the low-income segments, Amer said the government offers subsidised basic commodities. CBE continues to provide dollars needed for the importation of basic food commodities, fuel, and wheat at the official exchange rates to avoid burdening citizens with price increases.
Regarding a number of companies’ announcements that they would exit the Egyptian market due to the lack of dollar liquidity, Amer said: “Investments do not escape from Egypt. If someone has single piece of evidence, they can show it to me; investments are flowing to Egypt.”
General Motors announced during the first week of this February that it would temporary close its factory if the crisis surrounding the dollar liquidity is not resolved, validating its decisions by stating that banks have stopped opening letters of credit for the import of manufactured cars and the goods required for production.
The company controls 23.8% of the automotive market, having topped the market’s sales throughout the past eight years.
Amer said he signed $9bn worth of Saudi investments in Egypt, however refraining from providing further information on these investments.
King Salman Bin Abdel Aziz of Saudi Arabia previously pledged to inject SAR 30bn worth of investments over five years. Those investments are expected to go to various sectors, currently being negotiated through the Saudi-Egyptian Coordination Council.
Amer added that the “company that threatened to halt operations in Egypt” has resumed its business, referring to General Motors. He noted that Egypt is the most profitable country for local and foreign investment, claiming that “no other country in Europe, the Middle East, or North Africa returns such profits”.