The Egyptian Cabinet approved a governmental commission to review tenders and contracts between the government on one hand and companies and factories on the other hand that were prior to EGP devaluation, stated the chairman of the Federation of Industries, Mohamed Al-Sweidy, reported Egypt Independent.
Al-Sweidy explained that gas prices increased in some industrial sectors where the rates are estimated in US dollar. Thus, the federation submitted a request to the Cabinet to provide gas prices in accordance to international prices. He added: “We got the government’s approval to re-examine the tenders after the floatation of the pound. The flotation has had a negative impact on production costs and has threatened the ability of companies contracting with the government to stick to the contracts.” However, Al-Sweidy added that factories’ that were impacted by the fluctuation in foreign exchange rates and had to reduce its production capacity due to problems with the foreign exchange market have begun to recover and restore their production capabilities.
In early November, Egypt devalued its currency by 48%, a measures that met a key demand by the International Monetary Fund (IMF) in order to secure a $12bn loan. The devaluation had pegged the Egyptian pound at 13 to the dollar, up from nearly nine on the official market.