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Egyptian Pound Falls Against Dollar in Currency Markets

A view from an airplane window shows buildings in a densely populated area, in Cairo, Egypt, March 23, 2024 REUTERS/Mohamed Abd El Ghany
A view from an airplane window shows buildings in a densely populated area, in Cairo, Egypt, March 23, 2024 REUTERS/Mohamed Abd El Ghany
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Egyptian Pound Falls Against Dollar in Currency Markets

A view from an airplane window shows buildings in a densely populated area, in Cairo, Egypt, March 23, 2024 REUTERS/Mohamed Abd El Ghany
A view from an airplane window shows buildings in a densely populated area, in Cairo, Egypt, March 23, 2024 REUTERS/Mohamed Abd El Ghany

The Egyptian pound fell against the dollar on Tuesday, nearing 48 pounds in some banks.

Despite Prime Minister Mustafa Madbouly’s assurance of clearing all goods at Egyptian ports, some traders are holding back deliveries, expecting the pound to weaken further.

Madbouly mentioned that the Finance Ministry seized $1.7 billion worth of goods, but owners are hesitant to accept them, waiting for the dollar’s price to drop.

Capital Economics predicts the Egyptian pound will hit 49 against the dollar by year-end, down from the current 47 average, and may drop further to 50-55 in the coming years.

Meanwhile, Egypt’s GDP is expected to grow by 2.3% in 2023-2024, then dip to 1.5% in 2024-2025 before bouncing back to 5% in the following fiscal year.

The transition to a more conventional economic policy will initially slow down growth, but it's expected to pave the way for stronger GDP growth in the long term.

The recent Central Bank’s decision to reduce the pound’s exchange rate hints at a more flexible monetary approach.

This could mean avoiding interest rate hikes and securing an $8 billion deal with the IMF, along with additional assistance from the European Union and the World Bank. It’s a positive sign for Egypt’s financial support.

Those agreements have improved Egypt’s financial standing abroad, with all financial aid promises expected to bring in a significant flow of foreign currency, covering more than the total external financing needs of Egypt.

Meanwhile, Capital Economics notes that foreign capital inflows into local bond and stock markets have sped up, with hopes that Egypt's political moves will boost direct investment.

However, it anticipates some challenges ahead, as the government intends to stick to tight fiscal policy and aims to increase the initial budget surplus from 2.5% to 3.5% of GDP.

Additionally, Capital Economics points to plans to extend the maturity of public debt, which will ease concerns about Egypt's fragile debt situation.

The research firm expects the government debt-to-GDP ratio to drop to 93% in 2024-2025 and 89% in 2025-2026 from an estimated average of 96.2% in the current fiscal year.

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Saudi Arabia Makes History with Adoption of Riyadh Treaty on Design Law

Photo of the Riyadh Diplomatic Conference on the Design Law Treaty (Asharq Al-Awsat)
Photo of the Riyadh Diplomatic Conference on the Design Law Treaty (Asharq Al-Awsat)
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Saudi Arabia Makes History with Adoption of Riyadh Treaty on Design Law

Photo of the Riyadh Diplomatic Conference on the Design Law Treaty (Asharq Al-Awsat)
Photo of the Riyadh Diplomatic Conference on the Design Law Treaty (Asharq Al-Awsat)

Saudi Arabia has made history by uniting the 193 member states of the World Intellectual Property Organization (WIPO) to adopt the Riyadh Treaty on Design Law. This landmark achievement, realized after two decades of deliberation, underscores the Kingdom’s leadership in enhancing the global intellectual property system.

The announcement came at the conclusion of the Riyadh Diplomatic Conference on the Design Law Treaty, a rare event for WIPO, which has not held a diplomatic conference outside Geneva for more than a decade. It was also the first such event hosted in Saudi Arabia and the Middle East, representing the final stage of negotiations to establish an agreement aimed at simplifying and standardizing design protection procedures across member states.

Over the past two weeks, intensive discussions and negotiations among member states culminated in the adoption of the Riyadh Treaty, which commits signatory nations to a unified set of requirements for registering designs, ensuring consistent and streamlined procedures worldwide. The agreement is expected to have a significant positive impact on designers, enabling them to protect their creations more effectively and uniformly across international markets.

At a press conference held on Friday to mark the event’s conclusion, CEO of the Saudi Authority for Intellectual Property Abdulaziz Al-Suwailem highlighted the economic potential of the new protocol.

Responding to a question from Asharq Al-Awsat, Al-Suwailem noted the substantial contributions of young Saudi men and women in creative design. He explained that the agreement will enable their designs to be formally protected, allowing them to enter markets as valuable, tradable assets.

He also emphasized the symbolic importance of naming the convention the Riyadh Treaty, stating that it reflects Saudi Arabia’s growing influence as a bridge between cultures and a global center for innovative initiatives.

The treaty lays critical legal foundations to support designers and drive innovation worldwide, aligning with Saudi Arabia’s vision of promoting international collaboration in the creative industries and underscoring its leadership in building a sustainable future for innovators.

The agreement also advances global efforts to enhance creativity, protect intellectual property, and stimulate innovation on a broader scale.

This achievement further strengthens Saudi Arabia’s position as a global hub for groundbreaking initiatives, demonstrating its commitment to nurturing creativity, safeguarding designers’ rights, and driving the development of creative industries on an international scale.

The Riyadh Diplomatic Conference, held from November 11 to 22, was hosted by the Saudi Authority for Intellectual Property and attracted high-ranking officials and decision-makers from WIPO member states.