Food prices will not be affected by recent hikes in US dollar rates against the Egyptian pound, President Abdel Fattah al-Sisi said on Thursday, contradicting the predictions of many observers that the currency situation will likely trigger food-related inflation.
Attending military drills on Thursday, Sisi urged the Armed Forces to ratchet up efforts to distribute staple food commodities through its mobile outlets for prices that “suit low-income citizens, no matter how much dollar prices rise.”
Over the past few months, Egypt has been experiencing what observers believe to be its worst foreign currency crisis in years, with the country lacking enough reserves to finance its imports of basic commodities.
The country’s foreign reserves fell steeply since 2011, reaching just $16.5 billion in February.
On Monday, the Central Bank of Egypt devalued the country’s currency to LE8.85 per dollar, down from LE7.73. Two days later, the CBE strengthened the pound to LE8.78 per dollar.
Earlier this month, the bank removed a cap on dollar deposits it had imposed for individuals and companies to combat the black market. The step was aimed at facilitating the importation of vital commodities.
Edited translation from MENA
