Egypt’s international reserves dropped to critical levels recently and the Egyptian pound is under mounting pressure. Several factors are responsible, including decreased exports over the past two years by 19 percent; a decline in the ratio of merchandise exports to imports from 49 percent in 2010 to 36 percent in 2015; and a deteriorating trade deficit from US$25 billion to US$39 billion over the same period. This was compounded by a decrease in tourism receipts; a slowdown in the world economic activity; a serious decline in official transfers in 2014/2015, culminating in a considerable increase in the current account deficit from US$3 billion in 2013/2014 to US$ 12 billion in 2014/2015. Over and above, foreign capital flows have been highly volatile.
Against this backrop, this workshop addressed the following questions:
. What is the nature and size of the exchange rate problem?
. What is the impact of exchange rate depreciation on Egypt’s trade balance?
. What are the policy options to address the trade balance deficit and augment foreign currency receipts?
Workshop Chair: Omar Mohanna, ECES, Chairman
Presentation: Omneia Helmy, ECES
Discussion Leader: Ahmed Galal, ERF Managing Director