© Archyde.com.
Investing.com – A new devaluation is taking place in the Egyptian pound, taking another step towards levels of 20 pounds to the dollar, which is now separated from the Egyptian currency by 29 piasters, according to data from the Central Bank of Egypt.
And following the Egyptian pound fell yesterday, Monday, at the highest pace since the last exchange rate liberalization on March 21, 2022, where the pound lost 8 piasters in one go, and it fell in the middle of trading today, Tuesday, by two piasters.
The acceleration in the pound’s depreciation comes following statements by the Director of the International Monetary Fund regarding Egypt’s approach to signing a loan to support the country’s public finances.
Expectations are that the loan will be worth between 3 to 5 billion dollars, which is the loan that has been negotiated since last March, in order to bridge the country’s financing gap.
The pound in the central bank
The Egyptian pound is trading once morest at the lowest official historical price at all, following exceeding the levels of 19.56 pounds to the dollar, which were recorded on December 20, 2016, following the liberalization of exchange rates in November 2016.
According to the dollar exchange rate screen on the Central Bank of Egypt website today, Tuesday, the exchange rate decreased by two piasters, to record the selling price of the dollar at 19.7084 levels, while the purchase price recorded at 19.6000 levels.
Pounds in private banks
According to the screen of dollar exchange rates once morest the pound in private Egyptian banks, the pound fell by two piasters to levels of 19.69 pounds for the dollar for sale and levels of 19.66 pounds for the dollar for purchase.
This came in the Egyptian Gulf banks, the Commercial International Bank (EGX:) (CIB), the Abu Dhabi Islamic Bank, the National Bank of Kuwait (Piraeus), the Bank of Alexandria, the Egyptian Arab Land Bank, the United Bank and Credit Agricole Bank.
In the National Bank of Egypt and Banque Misr, the pound decreased by two piasters, bringing the selling price of the dollar to 19.67 pounds to the dollar, while the purchase price recorded levels of 19.61 pounds to the dollar.
lowering acceleration
Zilla Capital said that the Egyptian pound did not fall in sufficient value once morest the dollar, which suggests a drop in the price of the pound once morest the dollar, which was set by the parallel market, despite its inefficiency, and the market was at 21 to 22 pounds to the dollar.
And according to Bloomberg Economics’ forecasts, which see that the pound may fall by 23%, equivalent to 4.5 pounds, according to the current exchange rate, the value of the pound once morest the dollar is 24 pounds to the dollar.
Deutsche Bank (ETR) Research Anna Friedman and Christian Witowska said: “We expect further weakness in the currency, but we expect more gradual depreciation rather than sharp depreciation.”
Banks Goldman Sachs, Deutsche Bank (ETR:) and Citigroup say the Egyptian currency is overvalued by 10% and that the only way is for the Egyptian pound to fall as Egypt is in talks with the International Monetary Fund.
In the view of Deutsche Bank AG and Goldman Sachs (NYSE:) Group, Inc., the currency is overvalued by regarding 10% according to the real effective exchange rate, while Citigroup (NYSE:) has an underestimate of 5%.
On the other hand, Standard Chartered Bank (NASDAQ:) expected that the gradual devaluation of the local currency would continue down to levels near 21 pounds to the dollar before the end of this year, in line with the fund’s requirements.
In a recent report by Standard Chartered Bank, the bank expected that an agreement would be reached between Egypt and the International Monetary Fund on obtaining a loan of $6 billion.
