Egyptian lawmakers welcome parliament's approval of pact to join BRICS Bank – Economics

Egyptian lawmakers recently welcomed parliament's approval of a pact that would allow the country to join the New Development Bank, a report said. According to the report, lawmakers believe that joining this BRICS-backed institution will help Egypt reduce its demand for dollars and allow it to preserve its foreign exchange reserves.

Joining BRICS

Following the Egyptian parliament's recent approval of an agreement paving the way for the country to join the New Development Bank, lawmaker Mohamed Abdel-Hamid reportedly said the move helped reduce demand for US dollars. The New Development Bank, founded by Brazil, Russia, India, China and South Africa or the BRICS countries, seeks to support “public or private projects through loans, guarantees, equity investments and other financial instruments.”

In addition to helping Egypt maintain its foreign reserves, Abdel-Hamid, the deputy chairman of parliament's economic committee, said joining the institution allows the country to receive the bank's support in areas such as health, infrastructure and telecommunications.

"Egypt's entry into the New Development Bank of the BRICS group will also relieve the state budget of pressure to find US dollars to cover the country's imports, as members of the bank will be able to use their national currencies in exchange for trade," the lawmaker reportedly said.

According to an Economic Times report Egypt, which recently received a bailout from the International Monetary Fund (IMF), has become the third country to express interest in joining the group of five leading emerging economies known as BRICS.

Reducing the dominance of the dollar

Meanwhile, Abdel-Hamid's views on Egypt's prospects after joining BRICS were also echoed by another MP, Mervat Mattar. In her remarks after endorsing the pact, Mattar characterized BRICS as an institution that will also help reduce the dollar's dominance.

“The BRICS group is an important forum that can steer the course of the international economy away from American dominance and the US dollar,” Mattar reportedly said.

To support her argument, Mattar reportedly pointed to the war in Ukraine and its impact on Egypt's import bill.

Meanwhile, another lawmaker, Ahmed El-Awadi, chairman of parliament's defense and national security committee, said the move will create new markets for Egypt's agricultural and industrial products.

Register your email address here to receive a weekly African news update in your inbox:

What do you think about this story? Let us know your thoughts in the comments section below.

Terence Zimwara

Terence Zimwara is an award-winning journalist, author and writer from Zimbabwe. He has written extensively about the economic struggles of some African countries, as well as how digital currencies can provide an escape route for Africans.

Photo credit: Shutterstock, Pixabay, WikiCommons