The dollar and the Egyptian pound
Egyptian Pound
The black market for currency is suffering from a suffocating crisis, with a large number of speculators stopping
The exchange rate of the dollar breached new levels once morest the Egyptian pound in the official market, at the end of Tuesday’s trading. Since the largest and last reduction announced by the Central Bank of Egypt in the price of the pound once morest the dollar in early January, the US green note has witnessed slight but continuous increases.
On the other hand, the black market suffers from a suffocating crisis, with a large number of speculators stopping and importers heading to banks to obtain dollars, which caused a decline in implementation processes, at prices not exceeding 31 pounds and within limited ranges, which means the success of the Central Bank’s policies in narrowing the gap between prices. in the official and parallel markets.
Moody’s downgrades Egypt’s rating and changes its outlook from negative to stable
Since March of last year, the exchange market in Egypt has been witnessing intensive moves by the Egyptian government and the Central Bank of Egypt, to control the largest crisis in the exchange market since the launch of economic reform programs at the beginning of November 2016.
The highest dollar exchange rate at Abu Dhabi Islamic Bank came at 30.57 pounds for purchase, compared to 30.62 pounds for sale. And in 24 banks led by the Central Bank of Egypt, the exchange rate of the US green note rose to 30.52 pounds for purchase, compared to 30.62 pounds for sale.
The lowest dollar exchange rate was in 4 banks, led by the National Bank of Egypt and Banque Misr, at 30.42 pounds for purchase, compared to 30.52 pounds for sale.
Since last December, the government has been able to end the crisis of the accumulation of goods in the Egyptian ports, as it was able to release goods with a total value of close to 15 billion dollars, which caused the elimination of violent speculation that was occurring in the black market.
outlook
A few days ago, Moody’s had announced the downgrade of the Egyptian government’s long-term foreign and local currency ratings to B3 from B2 and changed the outlook to stable from negative. This comes at a time when the World Bank and the International Monetary Fund are speaking positively regarding the Egyptian economy during the coming period.
JLL: The depreciation of the pound prompted real estate developers in Egypt to freeze new housing projects
However, last November, the Fitch Ratings agency had announced a reduction in its outlook for the Egyptian economy to negative due to what it described as increasing external weaknesses, and said that more pressures might lead to a downgrade of the country’s rating. Last month, Standard & Poor’s confirmed Egypt’s credit rating at B level with a stable outlook, and said that the new support packages from the International Monetary Fund and the Gulf states will enhance Egypt’s ability to cover its financing needs.
The first comment from the Egyptian government came from the Minister of Finance, Dr. Mohamed Moait, who indicated that the Egyptian government dealt positively with the concerns contained in the report. He pointed out that his country’s government has taken integrated financial and monetary measures and policies that contributed to the “Standard & Poor’s” establishment, during the last period, in consolidating its view of the Egyptian economy with a stable future outlook.
He explained that the Egyptian government is committed to economic reforms and the structural reform program supported by the International Monetary Fund with an agreement that extends to 48 months, which allows for economic growth in the coming years and enhances the ability of the Egyptian economy to meet the country’s external and internal needs.
Standard & Poor’s: This is the impact of the depreciation of the pound and the shortage of the dollar on the Egyptian economy
Inflation levels in Egypt
With regard to inflation rates, official data revealed that it jumped to a higher-than-expected rate of 25.8%, on an annual basis, in January from 21.3% in December, the fastest rate in more than five years.
Inflation in January was the highest since December 2017, following a year of sharp devaluation.
The average opinion of 14 economists polled by Archyde.com showed that they expected inflation to be 23.75%. Five analysts expected core inflation to rise to 26.6%, from 24.4% in December.
Consumer price inflation rose in cities in general, but it was driven in particular by the rise in the prices of food and non-alcoholic beverages, which represent 32.7% of the index basket.
