A continuous decline in the dollar in Egypt … Do prices decrease? Arabausa

“Yes, the dollar fell, but as citizens we do not feel the effect of this on the ground,” said Kamel Mahmoud, the forty -year -old Egyptian, commenting on the continuous decline in the US dollar exchange rate against the pound for an Egyptian during the past days.

The price of the dollar fell against the pound in a number of Egyptian banks during trading, on Tuesday, by 5 to 8 piasters compared to its levels on Monday. For the third day in a row, the dollar continued to decrease against the pound, bringing the total decline about 36 piasters.

On Tuesday, the dollar recorded 48.67 pounds for purchase, 48.77 pounds for sale in the National Bank of Egypt, and 48.68 pounds for purchase and 48.78 pounds for sale in Banque Misr, the largest government hook in the country, knowing that it exceeded 50 pounds over the past months.

Mahmoud, a government employee who lives in the Menoufia Governorate (Delta of the Nile), told Asharq Al -Awsat: “The speed of the dollar’s decline needs with it for a clear intervention by the government in favor of the citizen. We must see practical steps, not just statements.”

Mahmoud’s words refer to statements made by the Egyptian Prime Minister, Mustafa Madbouly, on Tuesday, during his meeting in the presence of representatives of the chambers of commerce and industrial, to follow up the efforts to reduce prices, stressing that what is required is that the citizen witnesses a real decrease in commodity prices, especially since the dollar price records a decrease during the recent period against the pound, and improves the indicators of the Egyptian economy.

The Prime Minister called on the President of the Federation of Chambers of Commerce to collect the heads of all chambers of commerce, and to agree on real price discounts for various commodities.

Madbouly made it clear, during the government meeting, last Wednesday, that the government is working to hold extensive meetings with officials to reduce the prices of strategic goods, especially in light of the decline in the price of the dollar against the pound.

The price of the dollar in the Central Bank of Egypt in the first days of the current year recorded 50.77 pounds for purchase, and 50.90 pounds for sale, and he continued in these limits for subsequent months, until on the first of June (June) he recorded a value of 49.67 pounds for purchase and 49.81 pounds for sale, which called the Prime Minister to comment in the first government meeting after this decline: “Why does someone not speak now if there is a decline?”.

Egypt has witnessed a crisis in providing hard currency in the past two years with the exacerbation of inflation rates, and the dollar exchange rate reached 70 Egyptian pounds in the parallel (black) market, with the beginning of 2024, while the official exchange rate in Egyptian banks was 30.9 pounds against the dollar, but obtaining it was difficult; This prompted the government to liberalize the Egyptian pound’s exchange rate completely against foreign currencies and left it to the forces of supply and demand on March 6, 2024.

The claims for the decline in prices also found their way on social media platforms, amid questions among their pioneers about the possibility of achieving this decrease with the continuous decline in the dollar.

Member of the Egyptian Society for Political Economy and Legislation, Walid Jaballah, told Asharq Al -Awsat that the recent decline in the price of the dollar is supposed to reflect positively on the prices of goods and services, as a result of the decline in production, distribution and trade costs in general.

However, it indicates that the Egyptian market is characterized by an unbalanced response to the movements of the dollar, as it is noticed that the prices raised the prices when the foreign currency rise, in exchange for a clear slow in its response to the decline.

The expert explained: “This response style is related to the nature of the local market, which needs long periods in order to translate positive changes in the exchange rate into actual declines in basic commodity prices.” He added: “The slow response when the dollar fell is one of the structural challenges in the Egyptian market, which requires direct intervention from government agencies.”

The expert praised the Egyptian government’s tendency to communicate with producers and merchants in order to push them to reduce prices, considering this measure a positive step towards building a joint understanding between the active parties in the market, and called for the expansion of this effort to include civil society institutions, by enhancing the provision of goods in government exhibitions and consumer societies.

In turn, the economist, Adel Amer, told Asharq Al -Awsat: “It is natural for the dollar’s decline in prices to be reflected, but this effect will be gradually appeared due to the presence of stocks of goods that were previously purchased in dollars at its higher level (about 50 pounds), and with the discharge of this stock within a maximum of 4 months, which is the average inventory cycle in Egypt, the prices will begin to decrease when the goods are imported at the new price.”

The expert suggests a decline in prices with the continued decline in the dollar or its stability at the current levels, pointing out that there are expectations that the dollar will continue to decline to approximately 45 pounds, in light of the expectations for increasing investments.

The annual inflation of consumer prices in Egyptian cities decreased to 14.9 percent during June 2025 from 16.8 percent during May. This is the first decline after 3 consecutive months of height.