Shell invests in Mina West gas development in Egyptian Mediterranean Sea    Egypt's FM highlights 'soft power' in Mali meeting with alumni    Egypt's foreign minister opens business forum in Niger, targets new partnerships    Egypt's FM delivers Al-Sisi message to Niger's leader, seeks deeper security ties    Rafah Crossing 'never been closed for one day' from Egypt: PM    Egypt will keep pushing for Gaza peace, aid: PM    Remittances from Egyptians abroad surge 70% YoY in July–May: CBE    Sudan's ambassador to Egypt holds reconstruction talks on with Arab League    Egypt's current account gap narrows, but overall BoP records deficit    Al-Sisi urges accelerated oil, gas discoveries, lower import bill    Egypt hosts international neurosurgery conference to drive medical innovation    Egypt's EDA discusses Johnson & Johnson's plans to expand investment in local pharmaceutical sector    I won't trade my identity to please market: Douzi    Sisi calls for boosting oil & gas investment to ease import burden    EGX to close Thursday for July 23 Revolution holiday    Egypt, Senegal sign pharma MoU to unify regulatory standards    Egyptian Drug Authority discusses plans for joint pharmaceutical plant in Zambia    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt foils terrorist plot, kills two militants linked to Hasm group    Giza Pyramids' interior lighting updated with new LED system    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Korea Culture Week in Egypt to blend K-Pop with traditional arts    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



His Hand is in Youssef Boutros'' Hand
Published in Almasry Alyoum on 10 - 12 - 2008

There is no quarrel between the government and the Central Bank of Egypt (CBE) president Farouk al-Okda, but each of them has a goal to achieve. The government does its best so that its goal would not be at the expense of al-Okda, who in turn tries hard to achieve his without clashing with the government.
 
Al-Okda has concerns over two things; the first thing is savers' tendency towards dollarization, namely betting on the dollar's high exchange rate in the future and turning the deposits from the national currency to the dollar. 
The US dollar now equals LE 5.4, so 100 US dollars equal LE 540, but if the dollar increased in the future to equal LE 7, this means that the $100 will equal LE 700 and, accordingly, those who turned their deposits from the Egyptian pound to the dollar will get LE 160.
 
This was followed by currency dealers in the past till al-Okda came and put an end to this problem. Indeed, he must be given credit for that.
The second thing over which he has concerns is the high rate of inflation, as al-Okda tries hardly to bring it down. This is, in fact, his role that nobody should interfere with.
 
On the other hand, the government wants an influx of foreign investment and a boom in domestic investment, which would in turn create new jobs. It also wants to encourage exports, face depression, fight recession, and support local products to be up to world competition.
Therefore, the government needs to reduce interest rates on loans, a decrease rejected by al-Okda unless there was a retreat in inflation lest people resort to the dollarization once again.
 
Indeed, whoever contemplates in the two goals will immediately discover that there is conflict between the two, but there is a safety zone where the two parties can meet because the government, for example, is betting on not dealing with inflation from a historical but rather from a futuristic perspective.
 
This perspective shows that the inflation rate would inevitably retreat in the coming period due to many reasons, such as the notable decline in prices of many commodities and the sharp drop in domestic consumption.
 
Anyone following up satellite channels will notice a continuous coordination between central bank heads and finance ministers in all countries as was the case with "Bernanke", the US Federal Reserve head and "Paulson", the US Treasury Secretary, as the two men have never met people separately.
Anyone following up the world news will also discover a big increase in the number of meetings of the board of directors of central banks and committees on monetary policies all over the world.
In fact, world central banks face a stormy crisis. Therefore, they hold meetings every two or three days at the most and not every two or three months as was the case in the past. Unfortunately, this does not happen in Egypt although we are in bad need for such meetings.
 
When will the CBE president appear with his hands in the hands of Minister of Finance Youssef Boutros?


Clic here to read the story from its source.