2024-03-25 14:55:00
04:55 PM Monday 25 March 2024
Written by Manal Al-Masry:
Four bankers who spoke to Masrawy attributed the sudden rise in the price of the dollar today, Monday, once morest the pound for the first time following liberalizing the exchange rate to foreign investors selling treasury bills to achieve profit from interest rate differences, in addition to oil companies transferring their dues.
They explained that the flexibility of the exchange rate movement up and down is a healthy phenomenon and reflects the credibility of the central bank in following a free exchange rate policy.
The price of the dollar rose once morest the pound at the end of trading today, Monday, by regarding 93 piasters compared to the end of trading yesterday, exceeding 47 pounds in banks.
The price of the dollar suddenly increased during trading following it began to gradually decline at the end of the first day of the float, from regarding 50 pounds to under 46 pounds by the end of yesterday, before returning to its rise today.
Two bankers told Masrawy that the market witnessed today some foreign investors selling their treasury bills in pounds with the aim of achieving profit from interest rate differences following they declined during the last two auctions.
The interest rate on treasury bills decreased by regarding 4% and 4.6% during the last two tenders offered by the Central Bank on behalf of the Ministry of Finance following increasing demand from foreign investors to invest in the Egyptian pound in exchange for selling the dollar.
The two bankers explained that the increase in foreigners’ sales of their investments in treasury bills in pounds created a demand to buy dollars with the aim of converting their profits from the bills into dollars, which led to an increase in their price.
They added that the movement of the dollar with increased demand is a healthy thing that reflects the flexibility of the exchange rate and the lack of profitability from the pound’s price differences like previous times.
Two other bankers told Masrawy that there is another reason, which is that oil companies transferred their dues outside Egypt today, which led to the rise of the dollar in accordance with the free market policy.
The Central Bank returned to liberalizing the exchange rate for the first time in a year on March 6, with the aim of eliminating the parallel market for currency trade and closing the financing gap.
Mohamed Abdel-Al, a banking expert, said that the dollar’s movement enhances foreigners’ confidence in the ease of entry and exit from the market and in the real price of the pound once morest the dollar, which increases their confidence in the flexibility of the exchange rate.
In 2022, regarding $22 billion in indirect foreign investments left the Egyptian market due to the negative consequences of the Russian-Ukrainian war, which led to increased pressures of foreign exchange shortages in Egypt.
But following Egypt announced a return to liberalizing the exchange rate, indirect foreign investments returned once more to invest in the Egyptian pound, which contributed to the abundance of foreign exchange and the return of circulation of the “interbank” mechanism for buying and selling the dollar between banks.
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