The value of the dollar falls by more than 0.22 EGP, the biggest drop in 9 months

The dollar rate at banks operating in the domestic market lost more than 22 piastres against the Egyptian pound on Sunday, in the wake of the high supply of dollars amid the lack of demand.

The Central Bank of Egypt (CBE) exchange rate hit its lowest level since May 8, 2018, marking EGP 17.6303 buy and EGP 17.7697 sell, against EGP 17.8553 buy and EGP 17.9743 sell Thursday.

In banks, the average exchange rate, according to the CBE, reached EGP 17.6508 to buy and EGP 17.7508 to sell, compared to EGP 17.865 to buy and EGP 17.9544 to sell.

At the Arab African International Bank, the exchange rate fell by 20 piastres to 17.65 EGP for buying and 17.75 EGP for selling. The same rate was recorded at Crédit Agricole and at the Banque du Canal de Suez.

At the Commercial International Bank, the dollar lost 15 piasters in value against the pound sterling, reaching EGP 17.69 buy and EGP 17.79 sell. The greenback fell 14 piastres at the National Bank of Egypt and Banque Misr as well, coming in at EGP 17.65 buy and EGP 17.75 sell.

According to a senior banker speaking to Daily News Egypt, banks on Sunday witnessed significant exposure to the dollar by individuals and businesses. In contrast, demand for the US dollar has stopped.

The source attributed the development to strong market expectations of a significant decline in the value of the dollar over the coming period, after CBE Governor Tarek Amer’s statements on the forex market made to Bloomberg this week. last.

“We are committed to ensuring a free market subject to supply and demand. But we have caveats that help us counter speculators or unregulated market practices, ”Amer said.

“The reserves help us defend the new exchange rate system and the interest rate can be used as a tool.”

According to the source, the market understood that Amer might point to the possibility of a decline in the dollar’s price in the coming period, which has prompted US dollar holders to ditch the greenback, while companies and individuals have stopped buying.

Bloomberg expected the governor’s comments to reassure foreign investors following Egypt’s economic policies as the country nears completion of the $ 12 billion extended three-year facility deal dollars with the International Monetary Fund (IMF).

The source pointed out that Amer’s confirmation that Egypt had received the IMF loan payment in late January or early February at the latest also helped spread the spirit of optimism in the market and supported the possibility of ‘a further decline in the dollar over the coming period.

Mohamed Abdel Aal, board member of Suez Canal Bank and Arab Sudanese Bank, said Egypt saw an influx of $ 1 billion in foreign investment in public debt instruments in January, which marked a notable improvement in the volume of foreign assets in banks operating in the local market, after a few months of decline.

He added that foreign exchange resources have also seen a significant recovery in the last period, mainly thanks to income from tourism and remittances from Egyptians working abroad, which has also helped to increase revenue. of the banking sector from foreign currencies, thus increasing the supply of dollars in the interbank market, as well as the free market between banks and customers.

He pointed out that the CBE subjects the elements of its banking policy and systems to a variety of tests to measure their ability to withstand potential pressures and risks.

“In my opinion; the exchange rate mechanism since the float has successfully passed a series of consecutive and miscellaneous pressure tests,” Abdel Aal said.

Further, he pointed out that Amer’s remarks can be a kind of clever test, pointing out that the Egyptian forex market has come under a lot of pressure and has come out with overwhelming success, including the abolition of the mechanism. entry and exit of foreign currencies. investors via the CBE to the interbank market.

Further, he said that the upward and downward movement of the exchange rate through the interbank is necessary to give the mechanism the lifeline of the freedom to price based on market conditions. supply and demand.

He added that the CBE will be ready with its tools and mechanisms to counter speculation, which is a legitimate decision taken by all central banks around the world. The CBE can intervene to buy and sell to restore market equilibrium, or by raising or lowering interest rates.

Comments are closed.