A 40% fall in the value of 3 Middle East currencies in 2022
According to Iran Economist, many national currencies of the Middle East faced unprecedented pressure in 2022 under the influence of domestic and international developments. The repeated increase in the interest rate in the United States, which caused the value of the dollar to grow to the highest value in the last two decades in the world markets, put a lot of inflationary pressure on national currencies in the world, especially in the Middle East, which are largely dependent on the import of all kinds of goods.
The Arab oil countries in the region, which have abundant oil income and small population, were able to prevent the fall in the value of their national currency this year by supplying oil dollars in the market, but in other countries we have seen increasing inflation and a significant drop in the value of the national currency. So that the value of Egyptian pound, Lebanese pound and Turkish lira decreased by more than 40% this year. The Iraqi Dinar and the Zionist Shekel have also fluctuated a lot this year.
The decrease in foreign exchange income due to the export of non-oil goods, the decrease in tourism, the drop in the income of the labor force sent abroad due to the stagnation of economic activities, as well as the decrease in the flow of foreign capital are other factors that weaken national currencies in the Middle East during 2022.
Egyptian pound; More weakness is coming
The Egyptian pound has continued its downward trend against the dollar under the influence of a series of macroeconomic and geopolitical conditions, and while Cairo is trying to meet the conditions of the International Monetary Fund to receive new loans, the pound’s value is expected to continue.
The value of the Egyptian pound decreased by 8% on January 4 this year, which was the largest one-day drop in the value of this currency against the US dollar. Every US dollar reached 26.5 pounds on this day. In response to this fall, Egyptian banks increased the interest rate for one-year savings to 25%.
The national currency of Egypt has lost a total of 40% of its value during 2022 and has had one of the biggest declines among the national currencies of developing countries this year.
Experts expect the Egyptian currency to lose another 5 percent of its value to 28 pounds against the dollar.
The Egyptian government hopes to help strengthen the pound by attracting $10 billion in direct foreign aid from the International Monetary Fund and other sources such as inflows from Persian Gulf countries.
Lebanese pound; Alarming record breaking
The country of Lebanon has faced successive records in the devaluation of its national currency in 2022, so that the value of each US dollar has reached a record of 38 thousand pounds.
The economic crisis has pushed many people into poverty in this country and caused a shortage of essential goods such as clean water, electricity and medicine.
According to official statistics, the inflation rate in Lebanon has reached 189.4 percent during the 11 months of 2022. Fitch expects Lebanon to have the second highest inflation rate in the world after Sudan in 2022.
The World Bank has considered the current economic crisis in Lebanon to be the worst economic crisis in the modern history of this country. So far, the Lebanese government has not been able to carry out the structural and financial reforms required by the International Monetary Fund to receive $3 billion in aid from this institution.
The value of Lebanon’s national currency has decreased by more than 40% in 2022. Lebanon’s economy collapsed after it announced in March 2020 that it would not be able to repay $31 billion in euro bonds. The value of the pound fell by 90% on the black market at that time.
Iraqi Dinar; Sanctions hit
The value of the Iraqi dinar has decreased following the US sanctions against the country and the blacklisting of several Iraqi banks. These sanctions have caused a shortage of dollar bills in the Iraqi market.
Every US dollar is traded for 1,580 dinars on the streets of Iraq. The official dollar rate in this country is 1470 dinars.
The Central Bank of Iraq has emphasized to assure the economic operators in this country that it will meet all the needs of this country in foreign trade with the official currency price.
This bank has implemented measures to stabilize the national currency of Iraq, including reducing the exchange rate for foreign trips and offering dollars at the official rate in the market.
The value of the dinar has not fluctuated much in recent years and has decreased by about 8% in the past year, but in recent weeks we have endured a lot of pressure and we have seen the free market rate move away from the official exchange rate.
Shekel of the Zionist regime; Worry about inflation
The value of the shekel of the Zionist regime decreased by more than 12% last year, and considering the 5.3% growth of inflation in this regime in November, the downward trend of the shekel’s value is not expected to stop soon. The inflation rate in this regime has reached the highest figure in the last 15 years.
Inflation reduces the purchasing power of consumers and causes the shekel to fall in value. The head of the central bank of this regime has admitted that the shekel has become very volatile and especially in the fourth quarter of 2022, it had a lot of instability. He said that he will increase the interest rate to increase the value of the shekel. Every US dollar is now traded at 3.52 shekels.
Turkish Lira; 40% drop in 2022
The value of the Turkish lira against the dollar has decreased by more than 40% in 2022. Meanwhile, the Turkish lira lost 77% of its value in 2021. Thus, in two years, the value of the national currency of Turkey has reached less than half.
Every US dollar is now traded at 18.55 lira. The government plans to help strengthen this currency with policies such as dollarization of the Turkish economy and promoting the use of the lira.
The Central Bank of Turkey has said that it plans to increase the lira’s share of the total deposits of the country’s banking system to 60% in the next six months.
But the increasing inflation is an obstacle in the way of curbing the devaluation of the lira in Turkey. The inflation rate in this country reached 64.3% in 2022, which is the highest inflation rate in this country in the past 75 years.