China Yuan devaluation may hurt Egyptian economy; expert says

China’s sudden devaluation of Yuan will probably affect the Egyptian economy negatively if the value of Egyptian pound remains steady, financial expert Mohamed Reda said Sunday.

He stated that if Egyptian pound’s value remained with no change, the competitiveness of the Egyptian exports will shrink in comparison with imports which are expected to grow significantly amid the decline in the prices of Chinese products to penetrate the Egyptian market with cheap prices. As a result, the demand for the locally-produced products will be decreased leading to an increase in unemployment rates and a decline in growth rates.

The expert said that Egypt has to take quick steps to save the local industry and the competitiveness of the Egyptian exports by devaluing the Egyptian pound as well as decreasing interest rates or by imposing restrictions and precautionary measures on imports like those on sugar and steel imports.