Currency Wars: The Devaluation of the Egyptian Pound

Currency Wars: The Devaluation of the Egyptian Pound

Since the early 2010s, ‘currency wars' was becoming a growing buzzword, where major central banks around the world were tightening their policies, while others were left with no choice but to devaluate their currencies. While history may be repeating itself, there are lessons to learn. And as for the bigger picture? Egypt is not alone.

Currency wars typically involve countries with a competitive export edge on one side and import-based economies on the other. According to the Washington Post, the phrase “currency wars” first emerged around 2010, when Brazil’s then-finance minister, Guido Mantega, accused wealthier nations of devaluing their currencies to stimulate economies still reeling from the 2008 financial crisis.

But it was decades earlier when a round of devaluations across the world in the 1920s was thought to have stimulated the Great Depression. It was said that countries were depressing the value of their currencies on purpose just to increase their exports.

Fast forward to 2022, with the US hiking its interest rates in its most aggressive move in 30 years, it has set the scene for yet another currency war, where other economies are setting their places on the chessboard of the world of trade.

As import-based economies have been taking one