(AFP Photo)
Egypt’s non-oil private sector conditions have worsened at the quickest rate since September 2013, HSBC Egypt Purchasing Managers Index (PMI), published on 3 March, said.
This has been due to “robust contractions” in output, new orders and employment rate.
The depreciation of the value of the Egyptian pound against US dollar has led to an increase in prices for the highest level in seven months, the report explained.
“A number of survey participants attributed weaker order books to an appreciation of the US dollar against the Egyptian pound,” the report noted. “Similarly, new export business declined at a faster pace in February, amid reports of instability across international markets in Europe and the Middle East.”
The value of the US dollar had remained at approximately EGP 7.14 during the past six months. In December, however, the Central Bank of Egypt (CBE) announced it will raise the number of weekly dollar bids, which led many analysts to forecast devaluation for the Egyptian pound.
The devaluation is believed by economists to reassure foreign investors who would like to invest in dollars. Others argued that prices of consumer goods, such as medicine, oil and some food products, will get higher.
New orders placed at Egyptian non-oil private sector companies fell for the second month running in February, the report said. It added that the rate of contraction accelerated to the quickest in almost a year and a half.
