Egypt and Russia's Dedollarisation Efforts Stumble
Despite ongoing efforts to strengthen economic ties and reduce reliance on the US dollar, Egypt and Russia's dedollarisation initiatives have made limited progress. Since the onset of the Ukraine war, both countries have faced significant challenges in bilateral trade due to Western sanctions against Russia. Egypt, which heavily depends on Russian food imports and tourism, has been particularly affected, facing difficulties in securing hard currency to address its fiscal and financial crises.
One of the key strategies has been to link the payment systems of Egypt and Russia. However, this initiative has not yielded significant results. Egypt, cautious of potential repercussions from the US, has been hesitant to fully embrace these changes, fearing sanctions. Additionally, the expected financial support from Russia and other BRICS countries via the New Development Bank has not materialised, further stalling progress.
Recent discussions have considered reintroducing Russian tourists to Egypt through a special prepaid bank card issued by the Egyptian Meeza and Russian MIR payment systems. This arrangement would allow Russians to purchase Egyptian pounds in Russia and use a prepaid Meeza card during their stay in Egypt, facilitating settlements in their respective currencies. Despite this, substantial barriers remain, and Egypt has yet to fully commit to this plan, maintaining a cautious stance.
Overall, while Russia has seen some success in aligning with Iran on dedollarisation, its broader agenda faces significant hurdles. Countries in the MENA region, including Turkey and the UAE, have shown reluctance due to Western pressure and the prevailing influence of US financial hegemony. This cautious approach highlights the complex geopolitical and economic landscape Russia must navigate to achieve its dedollarisation goals.