Stages of development of the Egyptian pound

The first pound was issued in Egypt in 1836, It was put into circulation in the Egyptian markets and replaced the official currency in circulation at the time, gold and silver.

The Egyptian pound is the oldest currency in the region, It was issued with a large value of up to what was equivalent at the time to 20,000 pounds at the present time and was called the pound because Egypt was under British occupation and the currency of England was the pound, which was later called the pound sterling.

The pound was divided into piasters where it equals 100 piasters and the shark was divided into ten millimeters, And its singular is Milim, During the reign of Governor Muhammad Said Pasha, the ten piasters were established, The Egyptians called her “Bariza” after she was struck and stamped in Paris, the capital of France.

On April 3, 1899, the National Bank of Egypt issued banknotes for the first time and the paper pound was issued and its value was equal to 7.4 grams of gold, This standard was used between 1885 and the outbreak of World War I in 1914. The Egyptian pound was pegged to the pound sterling and the pound sterling was equal to 0.9 Egyptian pounds.

Pound printing developed throughout the twentieth century, Where it was printed abroad and in 1968 the Central Bank of Egypt established a house for printing money and began to print the various denominations of banknotes denominations of the pound, ten piasters, 25 piasters and others on the first of December of 1968 and the bank also printed some Arab currencies for the benefit of its central banks.

During the reign of King Ahmed Fouad, the Egyptians noticed the presence of a picture of a servant named Idris on the pound, When they searched for the reason, they discovered that behind this was an interesting story, as this Idris was a servant in the palace and saw a vision in his dream, So he went to Prince Ahmed Fouad and told it to him, He told him that he saw that Prince Ahmed Fouad had become king of Egypt, The prince smiled and said it was difficult. Because his brother Sultan Hussein has a crown prince, He is the son of Prince Kamal al-Din Hussein, He is the one who will take over after him, but the servant assured him that he saw him in the dream sitting on the throne of Egypt and in the palace of Abdeen, The prince laughed, He joked that if he ruled Egypt he would put his picture of Idris on the pound.

The dream of Idris was already realized and Prince Kamal al-Din Hussein abdicated from the throne of Egypt and the Sultan and his father died, Suddenly Prince Fouad found himself Sultan of Egypt so he went to the palace to find Idris sitting praying so he sat next to him until he finished his prayer, Then he said to him, “Your dream has come true and you have become Sultan of Egypt. Your image will be on the first pound issued by my government” King Fouad I fulfilled his promise and issued the pound of Idris al-Falah on July 8, 1928.

History of the Egyptian Pound 5

“Egyptian Art Book on Banknotes” by Dr. Ashraf Reda reveals the designs, creations and innovations that accompanied Egypt’s official currency and says that Egypt remained without a specific monetary unit until 1834. When Muhammad Ali issued a decree stipulating the issuance of an Egyptian currency based on the system of gold and silver, each of which had unlimited exoneration power, The unit of money was a gold piece worth 20 piasters and its name is the golden riyal and a piece of silver with 20 piasters also called the silver riyal until the first Egyptian currency was issued in 1836.

In 1898, the first commercial bank to practice banking operations in Egypt was issued. It is the National Bank and the government granted it the privilege of issuing cash for 50 years, On January 1, 1899, the first paper pound was issued. Money in circulation in Egypt from 1899 to 1914 fluctuated between gold and pounds sterling, as well as Egyptian banknotes exchangeable for gold.

In 1930, for the first time, the watermark on banknotes began to be used to protect them from counterfeiting, and in 1944, the image of kings appeared on the coins, where a picture of the King of Egypt Farouk appeared on the pound, along with some archaeological pictures such as the Mosque of Muhammad Ali, And on other currencies such as the denomination of 25 piasters, 50 piasters, five piasters and ten piasters put the image of the leaders and kings of Egypt former such as King Tutankhamun Queen Nefertiti and after the July revolution put on the coins of ten piasters pictures of the categories of people such as the soldier, and the farmer, The worker, an Egyptian woman and her Sudanese sister are symbols of the unity of the Nile Valley.

In 1960, The law establishing the Central Bank of Egypt was issued, Where he took over the issuance of banknotes and on October 3, 1962 issued the first paper currency bearing the image of the eagle of the Republic as a watermark on the denomination of ten pounds, In 1979, the pound was issued in a smaller size, With the image of the Sultan Qaitbay Mosque with a floor of Arabic motifs, The drawings of the pound also varied and it was issued with archaeological decorations and inscriptions.

The year 1993 witnessed the issuance of a fifty-pound note for the first time in the history of the Central Bank. Where it was printed with a watermark of the image of Tutankhamun, By the end of 1994, the new hundred pound note was issued in a design bearing the image of the Sultan Hassan Mosque with backgrounds and a decorative frame of Arab arts with the head of the Sphinx in the middle in shades of red and green. The papers carried about 20 insurance items.

In October 2003, the Central Bank issued a new ten-pound banknote with a new modern design with more elements of insurance and protection with a picture of the Rifai Mosque and the back of the paper carried the image of King Khafre, The year 2007 witnessed the issuance of the first banknote denomination of 200 pounds with a design bearing the image of the Mosque of Qaitbay Amir Khor, She is the daughter of Sultan Al-Nasir Muhammad and used in the paper for the first time an insurance element, a hologram strip that reflects the colors of the spectrum, As well as a magnetic tape recognized by the bank’s counting machines printed with the number 200.

In 2005, Egypt introduced the metal pound instead of the paper one. Dealing with the pound was banned in the Egyptian market until Tarek Amer, the current governor of the Central Bank, issued a decision to print the pound banknote again.

Dr. Abdul Rahman Taha, The economist explains to “Al Arabiya.net” the stages of development and the value of the Egyptian pound, He says that the Egyptian pound had great value during the reign of Muhammad Ali until the revolution of ’52 for several reasons, Including that Egypt was a producing country that exports the finest types of cotton, foodstuffs and grains to Britain, and Britain was at that time the first country in the world economically and militarily, Therefore, the value of the Egyptian pound was strong, and even Britain, as a result of the strength of the Egyptian currency, pegged it to its currency, In addition, as a result of Muhammad Ali establishing a naval fleet and Khedive Ismail establishing the Suez Canal, this led to the arrival of Egyptian exports to the whole world, and Egypt exported all its products through its fleet and through the Suez Canal to the powerful and rich European countries in the world. Therefore, the demand for the Egyptian pound was large, its value and strength increased, and it was associated with gold, so its value increased more and more, Where the pound was based on gold reserves, In addition to the growing Egyptian exports, which led to an increase in demand for it.

The economist adds that economists in the world confirmed that the Egyptian stock exchange was ranked fourth in the world and one of the causes of the global financial crisis in 1929 was the collapse of the cotton exchange in Egypt. Where Egypt had 3 stock exchanges at that time, confirming that Egypt was lending to the United States of America after World War II, Rather, it contributed large sums of money to the Marshall Plan for the advancement of countries that were still recovering from the effects of the World War.

He says: What happened next was that Egypt replaced the pound with gold reserves and made it pegged to the dollar, which emerged strongly as did economic powers other than Britain, such as Germany, America, France, Japan and China, At that time, starting from 1956 to 1973, Egypt entered several major wars, decreasing its gold reserves, decreasing exports and turning from a producing country to a consuming country. The demand for the dollar increased as a global currency and the demand for the pound decreased, so its value began to gradually decrease, in addition to the cessation of the Suez Canal after the war and the decrease in resources, so imports increased at the expense of manufacturing and local production.

Dr. Abdul Rahman Taha points out that Sadat, after the end of the war, tried to dismantle and get rid of these problems, so he lifted subsidies on goods. In order to liberalize prices and reduce imports, but he opened the door to openness, so imports increased more and more, and every time the demand for the dollar increased, The shortage of exports increases and the value of the pound decreases, and this policy has continued until now, This led to a significant devaluation of the Egyptian pound against the dollar.

He says that the recent decisions taken by the Egyptian government and President Abdel Fattah al-Sisi are strong and capable of restoring the Egyptian currency to its real strength and value through several main pillars:

First of all: President Sisi has taken 17 bold decisions in his capacity as Chairman of the Supreme Council for Investment, and these decisions will increase local manufacturing, support and diversify exports, and transform Egypt into a productive country as it was in the past, reducing dependence on imports, reducing demand for the dollar and reducing its value against the pound.

Secondly: Liberalizing the exchange rate, which will eliminate the black market, open the door to foreign investments, attract them, provide real job opportunities, and create a productive environment that reduces Egypt’s dependence on its needs from abroad, encourages tourism, and provides Egypt with a large surplus of hard currency.

Thirdly: Eliminating subsidies on fuel, fuel and other goods and services, and this will reduce the burden on the balance of payments and thus facilitate the use of GDP, most of which was allocated to subsidies to spend in service sectors such as health, education and infrastructure, all of which ultimately achieve two direct goals: investing in the Egyptian person through health and education as the first factor in achieving development. The second is to provide infrastructure and create attractive elements for investment that would create a strong state entering the stage of economic progress.

Fourthly: Egypt’s entry into the energy era, which was achieved by new discoveries in gas and oil, all of which will show their effects from next year and the following year until Egypt reaches in 2021 to achieve energy self-sufficiency and enter the club of oil countries.

Fifthly: All of the above reduces the demand for the dollar and increases dependence on the pound, so it returns to its strength and becomes one of the currencies required internationally, Thus, it can stand against the dollar and the basket of other currencies.