The Egyptian pound came as a currency among 9 new currencies, and the Russian Central Bank chose to determine its exchange value against the ruble on a daily basis, with a value equal to more than 2 rubles, bringing the number of currencies it adopted to 43 currencies.
A number of economists believe that this step is very important in order to provide dollar liquidity to Egypt, and that it has positive repercussions on the Egyptian economy in facing the global economic crisis at the present time by increasing the size of the world’s dependence on the Russian ruble instead of the US dollar.
At the outset, Dr. Alaa Ali, an economist and head of the credit support group at the Egyptian Agricultural Bank, says that the Russian Central Bank’s announcement of expanding the list of currencies it sets within the official exchange rates against the ruble, to include 9 new currencies, including the Egyptian pound, will increase the volume of trade exchange between Moscow and many other countries. countries, and will reduce the world’s dependence on the dollar currency.
Ali continued, in his interview with “Sky News Arabia Economy”, that the decision is a breakthrough with regard to import operations that are stacked in the ports, and will contribute to the provision of many basic strategic commodities, primarily wheat, without putting pressure on the dollar and reducing the need for it.
The head of the credit support group at the Egyptian Agricultural Bank believes that the decision to adopt the Egyptian pound will have a great impact on the two countries, as the volume of trade exchange between Egypt and Russia is estimated at billions of dollars, and Egypt will benefit from Russian tourism coming to it in obtaining the Russian ruble in trade exchange, especially after it Trade between Egypt and Russia has gradually returned to normal over the past months.
And the economist added that Russia is a strategic partner for Egypt in many areas of cooperation and mutual economic interests, which was evident in the recent report of the Central Agency for Public Mobilization and Statistics, which showed that there was an increase in the volume of trade exchange between Cairo and Moscow, as Egypt witnessed imports from Russia. An increase of 16.5 percent, during the period between January and October of 2022 compared to the same period in the previous year.
Reducing pressure on the dollar
At the same time, Dr. Osama Al-Saeed, former dean of the Faculty of Commerce, Beni Suef University, says that adopting the ruble within the basket of currencies that Egypt uses for payment and collection will certainly relieve pressure on the dollar, in light of the dollar liquidity crisis in Egypt and the very difficult economic situation as a result of the Corona crisis, and the Russian-Ukrainian war. .
“Al-Saeed” confirmed in his interview with the “Sky News Arabia” website: “Egypt has mechanisms in international economic transactions that can greatly help it in facilitating trade exchange and benefiting from the current conditions, as the state depends on the Russian wheat necessary to provide food for citizens, Especially the loaf of bread, along with cooking oil and some other food industries.
“The trade balance of the two countries is constantly rising due to their mutual dependence in providing the local market’s food needs, as Russia imports fruits and vegetables from Egypt, along with some other raw materials, at a time when the value of trade between the two countries increased by 5.1 percent during 2021, to reach 4.7 billion. dollars, compared to $4.5 billion in 2022,” he said.
Increase Egyptian exports
And the founder of the Small and Medium Enterprises Institute at Beni Suefan University added: “The adoption of the ruble as a currency for payment and collection at the Central Bank will increase the volume of Egyptian exports to Russia, especially agricultural crops, as Russia is the largest importer of the Egyptian orange crop.”
- Allowing the use of the ruble as an accepted currency for settling debts in trade exchange between Egypt and Russia is a positive step.
- Among the advantages that will result is the contribution to increasing the volume of trade exchange between Egypt and Russia.
- Increasing Egyptian exports to the Russian market, and reducing the Egyptian demand for the dollar, and consequently, the pressure on the Egyptian pound will decrease.
- Increasing the flows of Russian tourists, and eliminating all obstacles that impede the increase of flights between the two countries.
- Increasing Egypt’s influence in obtaining all its wheat needs from Russia at competitive prices.
Egypt is close to joining the “BRICS” group
Dr. Mohamed Shaarawy, a professor of financial market economics, believes that the Russian Central Bank, by adopting the Egyptian pound as an official currency in Russia, “is very distinguished and will have a positive impact, as all Russian exports to Egypt will be in pounds and not in dollars, which means that Egypt is close to joining the BRICS group that includes A number of countries, namely Russia, China, India, Brazil and South Africa, meaning that all of Egypt’s imports from these countries will be in Egyptian pounds.
Shaarawi added, in his interview with Sky News Arabia, that: “The decision will lead to saving billions of dollars for Egypt, which will lead to lower prices, especially the volume of trade exchange between Egypt and Russia, which amounts to nearly $5 billion annually.”
And he added, “Egypt is seeking during the coming period that the agreement is also with China to accept coordination between them in the Egyptian pound as a currency that can be exchanged, especially since the volume of trade between it and Egypt reaches nearly $18 billion annually, and if that happens, it will be a strong positive blow to the economy.”
A clear mechanism for cooperation under international sanctions
Walid Diab, a member of the Grain Industry Chamber of the Federation of Egyptian Industries, believes that the decision is certainly important, but it must become clearer in terms of the extent to which it contradicts the sanctions imposed on Russia, noting that the Egyptian state’s decision has not been announced yet in terms of participation and exchange in the Russian ruble or not.
Diab confirmed in his interview with Sky News Arabia that the recognition of the Russian Central Bank in itself is very positive, and will benefit the Egyptian commercial sector in terms of export and import, but the mechanism of cooperation and application that will become clear in the coming days remains clear.
In response to the ongoing cooperation during the past months and Egypt’s import of wheat despite the international sanctions imposed on Russia many months ago, he said: “Food is certainly exempt from the sanctions, but an appropriate mechanism must be agreed upon for all parties, as the ruble as a currency is also difficult.”
#decision #Russian #Central #Bank. #ruble #provide #dollar #liquidity #Egypt