Devaluation would boost Egyptian exports by 10 percent: trade minister

Egyptian exports would rise by 10 percent if and when authorities devalue the pound, Trade and Industry Minister Tarek Kabil said on Tuesday.

Pressure has been mounting on the central bank to devalue the currency as Egypt struggles to revive an economy hit by political unrest that has driven away tourists and foreign investors – both major sources of hard currency.

The bank has been responding to the crisis by rationing dollars, giving priority to imports of essential goods and to exporters who need to import raw material for manufacturing.

Its policy of keeping the pound artificially strong has seen foreign currency reserves tumble from $36 billion before a mass uprising in 2011 to around $16.5 billion in August.

"If and when a devaluation happens it will help trade on both sides, limiting imports and boosting exports … We expect it could boost exports by 10 percent," Kabil told a Euromoney conference.

Egypt's trade deficit was 24.6 percent smaller in May compared with a year earlier, the statistics agency said last month.

The trade deficit was 25.2 billion Egyptian pounds ($2.8 billion), down from 33.4 billion in the same month a year earlier.

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