CAIRO: Egypt’s pound devaluation will be ‘inevitable’ in the coming period to cope with China’s yuan depreciation in August, Investment Minister Ashraf Salman said Monday.
The Central Bank of Egypt has kept the pound steady at 7.73 per dollar after two consecutive depreciations in July, however, Egypt is likely to soon join around 22 emerging markets forced to depreciate their currencies.
Speaking at the 20th Euromoney conference held in Cairo Monday, Salman said Egypt is not isolated from the world and the Egyptian government will apply some procedure to protect its economy from the global economic recession, but he did not any details about these procedures.
“The Egyptian pound’s depreciation is not a choice,” said the minister.
China decision to devalue its currency by almost 2 percent on August 11, will make Chinese imports much cheaper and experts have warned that such a decision will take its toll on the Egyptian trade balance.
Experts are arguing that Egypt will not be able to resist the need to devalue its pound for long, as it will hurt its export competitiveness and efforts to bolster foreign direct investment (FDI.)