The Impact of the Exchange Rate on the Main Egyptian Agricultural Indicators

نوع المستند : أبحاث علمیة متخصصة فی الاقتصاد الزراعی

المؤلفون

قسم الاقتصاد الزراعي، كلية الزراعة، جامعة القاهرة

المستخلص

Many changes have taken place in Egypt at various levels, whether political, economic, or social, in the last decade, especially after the 2011 revolution. One of these major changes was the decision to liberalize the Egyptian exchange rate against the US dollar that started in 2016. The liberalization of the Egyptian pound (EGP) has been a substantial and complicated process, defined by a succession of devaluations and reforms aimed at stabilizing the economy and tackling chronic challenges such as foreign currency shortages and inflation. However, this liberalization had a strong effect on the Egyptian food system since it is highly integrated with the global food system. The aim of this study is to highlight and investigate the impact of the liberalization of the exchange rate on the Egyptian agricultural sector using co-integration analysis. First unit root tests of Augmented Dickey-Fuller (ADF), and then Phillips Perron (PP). Co-integration tests using the Engle-Granger, and Johansen technique. The results showed that the impact of the exchange rate on the main agricultural indicators in Egypt as follows: increase in food prices, agriculture input prices, and agricultural import bills. The findings provide insight into adopting new reform and structural policies by Egyptian government, reallocating available agricultural resources, boosting local industries, and the necessity of directing more investments towards scientific research related to agricultural sector.

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