Egyptian debt reached 742.5 billion Egyptian pounds (£38 billion) after the Egyptian Central Bank had liberalised the exchange rate of the Egyptian pound, AlMesryoon.com reported yesterday.
The Egyptian news website reported Sharif Hasan Qasim, an economics professor at the Al-Sadat University, as stating: "Our foreign debt, which was until yesterday night estimated at $55 billion (489.05 billion Egyptian pounds) based on 8.9 pounds per one dollar, became 742.5 billion pounds based on an exchange rate of 13.5 pounds for one dollar."
Qasim said that liberalising the exchange rate had massive negative consequences on the size and scope of the Egyptian national and foreign debt, which increased by 253 billion Egyptian pounds in one night.
He also warned that liberalising the exchange rate decreased the value of savings held by Egyptians by up to 49 per cent. "It means that the Egyptian who has 100 pounds will lose half of their purchasing power."
The economics professor was reported as posing the question, "Who will pay the value of this loss?"
On Thursday night, the Egyptian Central Bank allowed the Egyptian pound to float freely in foreign exchange markets after it had pegged its exchange rate at 8.9 pounds per US dollar.
Egyptian foreign debt increased this year by $7.7 billion to reach $55.8 billion. By the end of 2016, Egypt's debt will likely reach its highest level for a quarter of a century.