After the decisions of the Central Bank and the rise in prices, the poor Egyptians are victims of the failure of the coup government

The local markets are witnessing a rise in the prices of all food and basic commodities amid fears of a continuation of the increase, especially after the decisions of the Central Bank to liberalize the exchange rate and raise interest on deposits and borrowing, in the absence of government control over prices, and even the monopoly of the military gang on many basic commodities and raising their prices.

The Central Bank had decided, in an extraordinary meeting a while ago, to raise interest rates by 200 basis points, and to devalue the Egyptian pound by about 15%, in addition to raising the rates of one-night deposit and lending returns and the price of the main operation of the Central Bank by 200 basis points, to reach 13.25% and 14. 25% and 13.75%, respectively.

Monetary Fund

For his part, economic expert Abdel Hafez Al-Sawy said, “All the decisions taken by the Central Bank since the appointment of Hassan Abdullah as caretaker on August 18 are arranging for the coup’s agenda to obtain an International Monetary Fund loan, considering that these measures are just palliatives, and will never amount to a treatment for Egypt’s problem.” economic and financial.”

Al-Sawy stressed in press statements that Egypt’s economic problems will not be solved except by increasing its gross domestic product through productive sources to provide goods and services with local resources and production that reduces dependence on abroad until Egypt’s equation with the world is adjusted, payments in dollars decrease, and dollar flows increase.

He warned that raising the interest rate would be a burden on Egyptian producers and raise the cost of production, and that the inflation rate would be much higher than the offered interest rate of 13.25 percent, and therefore would not be an incentive for savers to deposit their money in banks.

Al-Sawy pointed out that last August, banks offered certificates at an interest rate of 18 percent, and there is more than one interest rate, indicating that playing on the chord of the interest rate proves the failure of the coup government to provide an investment climate capable of withdrawing the savings of Egyptians and providing them for investment projects in the public or private sector. .

He said, “The Egyptians have lost confidence in the coup government’s capabilities, tools, and projects, stressing that these decisions mean more burdens on the Egyptians, raising the cost of production, and raising the price of goods and services in light of the constant income of the Egyptians.”

Al-Sawy stressed that the increase decided by the coup government in the entry of employees does not reflect a fair equation for the relationship between wages and prices. Because the difference between them is large, and if we look at the minimum wage at 2700 pounds when the exchange rate was 15.60 pounds, it is much better than the new limit at 3 thousand pounds at an exchange rate exceeding 23 pounds.

He explained that we are facing an equation that reflects the state of confusion of the economic administration of the coup government, the insistence on mechanical solutions and palliatives, and the failure to achieve a radical solution to Egypt’s economic problem.

negative effect

The economist, Dr. Abdel Nabi Abdel Muttalib, said, “The decisions to raise interest and float the pound will have a significant negative impact on the Egyptian citizen, especially the low-income, and the poor classes, criticizing the Central Bank’s justifications that it aimed to support price stability in the medium term, and confront inflation that exceeded 15%.” “.

Abdel Muttalib added, in press statements, that the final impact of these decisions remains related to the extent of the (coup) government’s ability to provide an umbrella of protection for the Egyptian citizen, monitor and follow up the markets, and provide basic commodities at government outlets at reasonable prices, indicating that this, of course, will not be achieved.

He pointed out that the government has the ability to do anything if it wanted to follow up on the markets and impose order that requires tougher penalties and strict enforcement of the law, but it does nothing of all that.

Abdul Muttalib stressed that this will depend on the instructions regulating these decisions, and if the government manages to gain the confidence of the importer, the negative impact on imports will be under control, explaining that if the prices of goods and services rise, it will lead to a rise in inflation, but this is not supposed to continue. height for a long time.

He explained that these policies are supposed to contribute to reducing effective demand, and this will lead to a decline in prices, and thus a decline in inflation, but this will need a period of more than a year for the impact of these monetary policies to appear.

strict control

On the other hand, Engineer Matta Bishai, head of the Internal Trade Committee of the Importers Division of the General Federation of Chambers of Commerce, said, “Increasing the exchange rate in bank transactions may lead to an increase in prices, but it will not affect food commodities significantly.”

Bishai said in press statements that most commodities witnessed significant increases during the last period as a result of producers and traders expecting a rise in the exchange rate, and therefore a large number of commercial sectors are not supposed to witness new increases as a result of these increases have already occurred.

Source: بوابة الحرية والعدالة by

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