While the U.S. dollar is making a roaring comeback, indicating an ease in inflation worldwide, some Middle East regional currencies are recording historic lows.
In Egypt, for example, the local pound has lost nearly 45 percent of its value over the past year, after dropping more than 9 percent against the U.S. dollar just in one day this month. And Egyptians are feeling the effects.
“I stopped buying meat. Chicken prices have now risen to 60 Egyptian pounds for one kilogram (2.2 pounds). I have three children, how will I cover their needs?” lamented Ramadan Saleh, a Cairo resident.
Carpenter Ramadan Majmoud in turn noted that “the prices change every day. Every merchant sells the goods for different prices. The problem is that we have no control over the markets.”
With salaries halved and banks restricting withdrawals, many analysts are now calling Egypt “the new Lebanon.” There, too, the pound has hit a new low, trading at 50,000 pounds to the dollar. A devaluation of 95 percent since 2019.
But Egypt and Lebanon are not alone. In Iraq, hundreds of soccer fans chanted, “Bring the dollar price down,” at their prime minister as he attended the final game of the Arabian Gulf Cup. The exchange rate of the local Iraqi dinar reached 1,659 to one U.S. dollar Friday, the highest price since 2004.
“The higher exchange rate is causing the market to be gradually paralyzed. There’s no customer demand. Prices are very high; they are higher every day,” said Iraqi shop owner Abdallah Gabr.
In neighboring Syria, an economic crisis triggered by the years-long civil war and Western sanctions has led the black market value of the local pound to skyrocket. And in Iran, where the government is drafting its budget for next year, the local Rial reached a new low against the U.S. dollar, trading at 449 thousand to 1 dollar.
With shortages in foreign currency spreading across the region, 2023 is already turning out to be one of an exacerbating economic crisis.
