An employee counts money at a bank in Cairo September 4, 2014. REUTERS/Asmaa Waguih
CAIRO, Oct. 28 (Aswat Masriya) - Hitting a record since the beginning of 2015, Egypt’s trade deficit widened in July to reach EGP 34.7 billion, up 38.8% compared to the same month last year.
In a statement Tuesday, official statistics agency CAPMAS attributed the July hike to a 2.6% drop in exports and a 24.3% increase in imports.
Hany Geneina, chief analyst at Pharos invesment bank explained that the increase in the value of imports was caused by the depreciation of the Egyptian pound against the dollar.
He said that the 202 percent increase in the value of imported petroleum products reflected the Egyptian government's focus on providing energy needed to support higher consumption of electricity during the summer months amid a weakened exchange rate.
For the first time this year, said Geneina, Egypt resorted to the import of liquified natural gas (LNG) just as private sector cement companies imported coal to operate their plants, playing a key role in driving up the import bill of petroleum prodcuts.
The Central Bank of Egypt has devalued the Egyptian pound four times since January 2015, when it traded at 7.14 Egyptian pounds to the dollar to reach EGP 7.53 against the greenback. In July and again earlier this month the pound lost a total 40 piasters, bringing the official exchange rate to EGP 7.93 to the dollar.
The devaluation takes the currency's decline for the year to about 11 percent.
Analysts told Aswat Masriya previously that the pound is projected to change hands at between 8.20 and 8.25 to the dollar by the end of 2015, signaling that the pound is depreciating faster than had been expected.