The decision by the Egyptian government to float the country’s currency will cost Saudi Pharmaceutical Industries and Medical Appliances Corporation (SPIMACO), Saudi Arabia’s largest medicines producer, SAR 40 million in fourth quarter, the company said in a statement.
The financial impact was estimated after the Central Bank of Egypt (CBE) announced the official rate last Thursday, the company added.
SPIMACO said it would also take precautionary measures to offset further FX losses by temporarily halting exports of its products until prices are adjusted to the new exchange rate.
The company is also studying the feasibility of manufacturing some products in Egypt to reduce production costs.
Egypt’s central bank earlier this month decided to freely float the pound and hike interest rates by 300 basis points as the government comes closer to fulfilling conditions required to get a $12 billion loan from the International Monetary Fund.
The official rate of the pound to the dollar is currently 16.35, according to the CBE.
Write to Reem Abdellatif at reem.a@argaam.com
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