Egyptian billionaire Naguib Sawiris has criticised the prolonged delay in implementing a much-anticipated devaluation of the pound in the northern country.

He suggested that authorities align the official exchange rate with the rising black market rate to alleviate the persistent foreign currency shortage in the nation.

According to the billionaire, deferring reforms is “a disaster that will increase the extent of the critical situation we are in,” Sawiris said.

The Egyptian pound has experienced a sharp decline on the parallel market, reaching 68-70 per dollar in recent days. This leaves it more than 50% weaker than the official rate, which stands at 30.9, Bloomberg reported.

What the billionaire said:
“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.”

Most analysts expect that Egypt will implement its fourth devaluation since early 2022 in the first quarter of this year. However, Sawiris, Africa’s seventh-richest person according to Bloomberg’s Billionaires Index, proposed that Egypt requires more than gradual adjustments to address the crisis.

“The correct thing is to start from the black market price and it will decrease gradually after there is an offer. Everyone who has it will agree to it. Selling through official channels if the two prices are equal.”

The series of previous devaluations has already halved the pound’s value, disrupting businesses and consumers in the Middle East’s most populous nation. Another devaluation would intensify the already painful surge in inflation, which has started to ease after reaching a record 38% in mid-2023.

source: business insider