Egypt’s central bank governor said Sunday that the country plans to develop a new currency indicator and add instruments to hedge against risks as the Arab world’s populous nation seeks to wean off people off the idea that the pound should be pegged to the US dollar.
“We will make an index for the Egyptian pound through a group of other currencies in addition to gold in order to change the culture that we are linked to the dollar,” Hassan Abdalla, the Central Bank of Egypt (CBE) governor said in an address at an economic conference in Cairo. Abdalla didn’t provide additional details.
Abdalla, who was appointed in August, said the CBE was also working to introduce currency hedging and had already finished futures contracts as it revamps its currency trading system. His remarks reflect Egypt’s bold step to revamp its currency exchange system.
The Egyptian pound has been kept largely stable against the US dollar, for years, a costly effort that Bloomberg said required interest rates to stay elevated.
Egypt has been ramping up efforts to fight inflation as the economic fallout of Russia’s war in Ukraine and an exodus of foreign investors in its local debt prompted a devaluation of the currency in March and has kept it under pressure since then.