The Ministry of Finance is considering increasing Egypt’s customs’ dollar exchange rate next month as the ministry reviews the rate on a monthly basis.
Governmental sources told Daily News Egypt that there is an intention to raise the value of the customs dollar next month to about EGP 17 per dollar, to approach the current dollar price at the Central Bank of Egypt (CBE), but the final value has not been agreed so far.
The ministry has fixed the customs exchange rate at EGP 16 per dollar since September 2017, and said it will review the rate each month.
The sources added that moving the customs dollar price is one of the mechanisms being studied by the ministry to compensate its losses due to the full implementation of the Egyptian-European Partnership Agreement.
Other governmental sources told DNE in previous statements that the full activation of the Egyptian-European Partnership Agreement will increase the value of customs’ exemptions next year to reach EGP 6bn instead of EGP 4.5bn.
Mohsen Al-Tagoury, a lumber importer and deputy head of General Division of Importers at the Federation of Egyptian Chambers of Commerce (FEDCOC), said any increase in the customs’ dollar price would lead to an average rise of 15-20% in lumber import costs.
He pointed out that the General Division of Importers demanded during its last meeting to reduce the customs’ dollar exchange rate next year to activate sales after the recession that recently faced the market.
Al-Tagoury added that the current customs’ dollar exchange of EGP 16 has already affected the volume of imports in different sectors.
Radwa Al-Swaify, head of research at Pharos Holding, said the rise of customs’ dollar exchange by EGP 1 would lead to increasing inflation rates by 0.5-1% on a monthly basis.
A large number of imported goods are not included in the basket of goods when measuring inflation rates, she added.
“The customs dollar price of gas is to be adjusted in accordance with the CBE’s exchange rate as was the case in the past,” Al-Swaify said.
She explained that the last fixing of customs’ dollar at EGP 16 was based on expectations that the dollar price would decline to EGP 16-16.50, which did not happen due to the recent emerging markets crisis.