Private sources confirmed to Al-Arabiya TV that the Central Bank of Egypt is currently preparing to launch an index for the Egyptian pound that includes a basket of international currencies and gold.
The sources stated that the index will be created to include a basket of currencies with a different relative weight in order to find a realistic exchange rate instead of relying on a major currency such as the US dollar.
The Governor of the Central Bank, Hassan Abdullah, had announced last October that the Central Bank aimed to launch a special index for the pound. It includes a basket of international currencies and gold.
The central governor pointed out that the link between the pound and the dollar is wrong, especially since the United States of America is not Egypt’s main trading partner, stressing that the culture must be changed that the pound is linked to the dollar and focus only on the pound’s decline against the dollar.
In an interview with Al-Arabiya, banking expert Mohamed Abdel-Al said that the new index will change the culture of dealers at home and abroad with regard to linking the Egyptian pound to one currency with weight, which is the “dollar”, and moving to a basket of currencies that determine the direction, whether up or down.
Abdel-Al added that basic pillars must be relied upon for the work of the index, including the selection of currencies that will have to be included in the index in order to assess the direction of the Egyptian pound, explaining that these currencies may be the most widespread in the global monetary reserve.
He stated that the currencies that represent the largest share in the Egyptian monetary reserve, such as the dollar, the euro, and the pound sterling, can be chosen alongside gold.