How Will Exchange Rate Liberalization Affect the Operating Costs of Outsourcing Companies in Egypt?
The Central Bank of Egypt (CBE) unified foreign exchange rates on Wednesday, March 8, 2024.
This decision raises questions about its impact on the operating costs of outsourcing companies in Egypt.
Opinions of Outsourcing Experts:
Positive Impacts
Reducing costs for foreign outsourcing companies.
Encouraging them to transfer their revenues to Egypt through official channels.
No significant increase in operating costs.
Amr Mahfouz Chief Executive Officer at El-Delta Electronic Systems calls on ITIDA to provide incentives for companies to transfer their dollar revenues to Egypt.
Mohamed El Derwy, Managing Director Target HR Services MENA ,Expected decrease in the cost of operating one seat, Positive effects on the industry.
He said, Prices of devices and technology tools will increase by 15-20%.
Saeed Reyad, Deputy Director / OSP Vice Chairman Expected increase in licensing fees, CRM applications, Microsoft programs, and antivirus software.
Difficulty in determining the dollar price for providing cross-border services.
Head of a Global Outsourcing Company, He preferred not to mention his name, said Cost increase of up to 150%.
Desire of skilled workers to travel abroad for better living conditions.
CBE’s commitment to maintaining price stability in the medium term.
Outsourcing companies rely heavily on technology tools.
Technology tools represent about 35% of the operating costs in outsourcing companies.
Difficulty for companies to price their services on a fixed basis due to fluctuations in the dollar exchange rate.
Experts’ opinions on the impact of exchange rate liberalization on operating costs are mixed.
There are some expected positive effects, such as reducing costs for foreign outsourcing companies and decreasing the cost of operating one seat.
There are also some expected negative effects, such as increasing the prices of devices and technology tools, licensing fees, and the difficulty of determining the dollar price for providing cross-border services.
It is important for companies to adapt to these changes by reassessing their costs and developing new pricing strategies.
