Debt reduction, not currency stabilization, is Egypt’s goal: Central Bank advisor

Debt reduction, not currency stabilization, is Egypt’s goal: Central Bank advisor

RIYADH: Stabilizing the price of the Egyptian pound is not a goal for the North African country, an advisor to the Governor of the Central Bank of Egypt has claimed while speaking on the sidelines of the International Monetary Fund and World Bank meetings. Hisham Ezz Al-Arab, who is also CEO of HE Advisory, suggested Egypt should instead be focusing on generating revenue to cover its debts. He said that Egypt's debt represents 80 percent of the country’s gross domestic product, which is a low percentage compared to the global level, where the world's debt represents 3 times the GDP. Egypt’s currency was pegged to the dollar until 2016, and Ezz Al-Arab warned that every 10 percent increase in the dollar's exchange rate against the pound translates to a 4 percent rise in inflation in Egypt, while the dollar's 10 percent decline against the pound reduces inflation by 0.5 percent. The consumer price inflation in Egyptian cities rose to 15 percent on an annual basis in September, compared to 14.6 percent in the previous month — the highest rate since November 2018, when it reached 15.7 percent. Reflecting on the central bank’s attempts to get a grip on inflation, Ezz