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Monday, January 28, 2013

Economic and Political News from Cairo

It's Monday evening and life remains calm, at least in this portion of the capital city.  Last night, president Morsi addressed the nation on the situation in the Suez / Port Said area.  It had been promoted on all the local channels and was covered live.

Some demonstrations continue downtown in Tahrir square and we understand that the Mugamma, or government center, building there was closed today.  Talking to friends, there is great concern that the demonstrators in Suez and Port Said were attacked by police with live ammunition.  Beyond that, one hears rumors of "the old government" is behind it all etc.

Most of our friends here are concerned with the state of the economy and the lack of attention to it  by the new government.  But they also indicate their patience and that they didn't expect economic miracles.  In the international press, the number of times I have seen the phrase "Egyptian pound plummets," has been increasing.  There had been quite a bit of use of that word "plummet" in the past two years so let's go to Yahoo Finance and take a look at the numbers.
EgyptEconomy1

This past month has actually seen a plummet.  But even so, the 12.3% drop in the EGP in the past two years is nothing compared to the wild ride of the Euro over the past few years.  Some of those plummets are about 20%.
EgyptianEconomy2

And if you want to compare the dollar to gold, silver or oil over the past few years - now there's some plummeting!  Remember gold at under $1000 an ounce and gasoline at $1.89 four years ago?
EgyptianEconomy3

Still, on this trip to Cairo I have occasionally encountered the response, "dollars or pounds?" when I ask, "how much?"  Even the neighborhood convenience store operator is willing to give me a 15% premium if I will pay in dollars.  So everyone want to hedge the pound a bit.  I hadn't heard that in previous trips and there was a time when the dollar was even looked down on versus the opportunity for Euros.

Meanwhile, we took a taxi up to Pyramids street last night and had a dinner at Gad's, self-proclaimed as "The Best Restaurant in Egypt!"  Business was very slow compared to any other time we have been there, but there were lots of people out on the street.  Here are a couple of pictures of the front of the building as well as a picture of the bedroom furnishings in the store next door.  I am trying to talk Linda into buying some of those tassels and drapes for our boudoir.
EgyptianEconomy-1

EgyptianEconomy-2

   

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