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Electricity Ministry may cease negotiations for new equipment purchases following pound flotation Offers and prices of companies changed after the US dollar exchange rate appreciated, say sources
The Ministry of Electricity is considering suspending negotiations for obtaining equipment for production and transmission companies until the price of the US dollar against the national currency stabilises. Sources at the ministry said that the offers and prices put forward by Arab and international companies changed after the surge in the dollar exchange rate against the Egyptian pound. Suspending negotiations would hinder new projects and planned maintenance and rehabilitation, according to the sources. Moreover, the sources noted that the increase in fuel prices will raise production costs, as well as operation and maintenance, and eventually cause great losses for the Ministry of Electricity. Transmission and distribution companies need cables, wires, transformers and spare parts, all of which saw price increases after the Central Bank of Egypt decided to float the pound on Thursday, they added. The sources noted that the decision to float the pound will cause short-term losses, as all contracts and agreements were based on an exchange rate of EGP 8.88 to the US dollar. The CBE liberated the price of the national currency against the dollar on Thursday, leaving banks to set their own prices through interbank mechanisms. The flotation led the exchange price to rise up to EGP 13 on the official market. The CBE removed restrictions on the deposit and withdrawal of foreign currency for individuals and companies, except those imposed on companies importing non-essential goods.
