The exchange rate of the dollar in Egypt jumped to more than 24 pounds in the morning of Sunday's trading, minutes after the start of official trading in banks, after it reached the level of 23 pounds, which was at the end of trading last week.
According to Arabiya Net, the pound in Egypt fell against the dollar by about 14.5%, on Thursday, after the authorities announced their commitment to a permanently flexible exchange rate system, coinciding with reaching an initial agreement to obtain a three billion dollar loan from the International Monetary Fund.
Last Thursday, the Central Bank of Egypt decided to increase the interest rate by 200 basis points, and to float the Egyptian pound, after which the dollar jumped to its highest levels.
In the exchange market, the highest dollar exchange rate was recorded in 7 banks led by the Misr Iran Development Bank and the National Bank of Kuwait, at 24.10 pounds for purchase, compared to 24.20 pounds for sale.
In 4 banks led by the Arab International Banking Company SAIB and the Arab Investment Bank, the dollar exchange rate rose to the level of 24 pounds for purchase, compared to 24.10 pounds for sale.
In the National Bank of Egypt, the green American paper recorded a level of 23.50 pounds for purchase, and 23.60 pounds for sale. Meanwhile, Banque Misr recorded a level of 23.15 pounds for purchase, compared to 23.25 pounds for sale.
The lowest dollar exchange rate at the Central Bank of Egypt was at 22.86 pounds for purchase, compared to 23 pounds for sale.
The Central Bank of Egypt had announced, after an extraordinary meeting, last Thursday, that it would adopt a flexible exchange rate system, with priority given to the primary goal of achieving price stability. He explained that the exchange rate of the value of the Egyptian pound against other foreign currencies will change according to the forces of supply and demand.
The Central Bank of Egypt said that it will work to build and develop the financial derivatives market with the aim of deepening the foreign exchange market and raising levels of foreign liquidity.
He pointed out that the exchange rate will reflect the value of the pound against other currencies through the forces of supply and demand, within the framework of a flexible exchange system, with priority given to the central objective of achieving price stability. He stressed that reform measures have been taken in light of the foregoing to ensure macroeconomic stability and achieve sustainable and comprehensive economic growth.
During the meeting, the Monetary Policy Committee of the Central Bank of Egypt decided to raise the interest rate by 200 basis points, by 2%. It was also decided to raise the overnight deposit and lending rates and the main transaction price by 200 basis points to reach 13.25%, 14.25% and 13.75%, respectively. It was also decided to raise the credit and discount rate by 200 basis points to reach 13.75%.
In his comment, the economist, Dr. Hani Genena, believes that the wave of the pound's decline will continue until mid-November, as Egypt has not obtained any funding so far, and all that has been announced is the funding program of $9 billion.
In his speech to Al-Arabiya.net, he indicated that the Central Bank of Egypt has several options and is able to stop the rise of the dollar, whether this is done by raising interest rates by large percentages, but in this case the local market will witness a difficult state of stagnation.
He explained that after the decisions to devalue the pound, the dollar exchange rate is currently at the level of 23 pounds, at a fair level, and it is expected that the intensity of the dollar’s rise will begin to decline by mid-November, after the meeting of the Board of Directors of the International Monetary Fund and the approval of financing for Egypt And the arrival of the first tranche of funding, followed by other donor institutions to start pumping what was agreed upon into the Egyptian market.
