In a surprise move from the Russian Central Bank on Wednesday January 18, the Egyptian pound was added to the Russian exchange rate list, the Russian Embassy in Egypt announced.
Egyptian economists praised this decision, describing it as a “positive step” for the ailing Egyptian pound.
Prior to this decision, Egyptian imports from Russia traded using the US dollar. This move increases reliance on both local currencies and reduces demand for the US dollar in both countries.
Not only will this decision allow Egypt to import from Russia in Egyptian pounds, it will also allow Egyptians who travel to Russia to be able to exchange their money from Egyptian pounds to Russian rubles. This reduces dependence on US dollar reserves since Egypt has been struggling with a shortage in the foreign currency for the past few months.
According to Egyptian economist Tarek Metwally, this step can also contribute to boosting tourism in Egypt. Since potential Russian tourists have been struggling to acquire US dollars, fewer of them have been visiting Egyptian resorts, where the US dollar is usually the currency used by tourists. Now that this decision has been made, Russian tourists will not need to depend on the US dollar as they can switch to EGP before traveling.
Aside from the Egyptian pound, Russia also added the Thai baht, the Vietnamese dong, the Serbian dinar, the New Zealand dollar, the Georgian lari, the Indonesian rupiah, the UAE dirham, and the Qatari riyal, to its exchange rate list.
According to the United Nations Comtrade database on international trade, Egyptian imports from Russia totalled nearly USD 2.48 in 2021.
Egypt and Russia have a long history of strategic ties and mutual cooperation in multiple fields. Egypt is Russia’s biggest wheat buyer, and in 2022, it was the second most popular holiday destination for Russians.
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