In a bid to help its own economy, Egypt is no longer using the US dollar and trying to use local currencies exclusively.

The BRIC alliance has recently added Egypt to its ranks. This partnership of countries originally included only Brazil, India, China, and Russia, who were working together to challenge the Western hemisphere’s hold on global currency and world economy. Their alliance is attempting to undermine the US dollar, and as Egypt has partnered with them, it is required to fade out or give up the use of the US dollar in monetary transactions.

The other countries have already taken steps to phase out the US dollar and have seen their own currencies get a boost as a result. Egypt’s government is likely going to see similar results.

For Egypt, this may be a chance to help pull the struggling economy out of a state of near collapse. Egypt is using local currencies to help combat the sometimes erratic control the dollar has had over its financial transactions. Countries that are part of BRICS are working towards being self-sufficient and not depending on trade with western economies in order to survive. This allows them to conduct their own business with the rest of the world and not be too bothered by U.S. sanctions.

Egypt’s Economic Struggles

The political turmoil in Egypt as well as the recent pandemic have brought the economy to a place of severe recession. The Egyptian pound is down to 30% of its value from where it was in 2022, demonstrating severe financial instability.

As a result, the Egyptian black market has flourished and driven down the Egyptian pound even further. Between 2019 and 2022, the Egyptian central bank’s funds fell 28%. Sensing that something drastic had to be done, Egypt has joined with BRICS and is working to push the US dollar out of its country. What the government has enacted against the US dollar amounts to a permanent ban.

This has had little effect on the US dollar, since news broke of Egypt’s decision on Friday, and the US dollar index has grown 0.09% over the last five days. The US dollar is up against the euro by 0.0431% today and down against the Japanese yen by 0.1472%.