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Egyptian billionaire Naguib Sawiris, renowned as the country’s second-richest man and esteemed for his timely economic insights, has once again voiced strong criticism against the Egyptian government’s prolonged delay in enacting an anticipated devaluation of the pound.
Sawiris, who ranks as one of Africa’s wealthiest individuals, suggests that aligning with the spiraling black market rate is imperative to address the chronic foreign currency shortage plaguing the nation.
In a recent Arabic-language statement posted on the social media platform X, Sawiris expressed his concerns, stating, “The delay in the required decisions… a disaster that will increase the extent of the critical situation we are in… and any attempt to remedy the duality of the exchange rate by offering the dollar at a lower price than the black market will not be successful.”
Sawiris urges alignment of official and black market rates amid currency crisis
Sawiris emphasized the need to commence from the black market price, gradually decreasing it after an official offer. He believes that achieving parity between the official and black market rates is essential, asserting that such a move would gain widespread acceptance among those involved in currency transactions.
Egypt’s pound has witnessed a sharp decline on the parallel market, reaching 68-70 per dollar in recent days, marking a more than 50-percent depreciation compared to the official rate of approximately 30.9. In the official market, the Egyptian pound has experienced a decline of more than 2.6 percent in the past year.
With the government nearing a deal with the International Monetary Fund (IMF) to enhance a rescue package, traders are hastily unwinding their bets on a substantial depreciation of the Egyptian currency in anticipation of potential changes early this year.
Devaluation dilemma: Sawiris stresses urgent economic solutions for Egypt
Despite expectations among analysts for Egypt to execute its fourth devaluation since early 2022 in the first quarter of this year, Sawiris, whose net worth is estimated at $6.29 billion, argues that decisive actions are necessary to resolve the crisis.
The prior rounds of devaluations have already halved the pound’s value, creating disruptions for businesses and consumers in the Middle East’s most populous nation.
Another devaluation could exacerbate the situation, leading to a painful surge in inflation, which had recently begun to cool after reaching a record 38 percent in mid-2023.
